IN THE CIRCUIT COURT OF THE 11TH JUDICIAL CIRCUIT ......CASE NO. 08-78557 CA 24 1. Sandy Lane admits...

IN THE CIRCUIT COURT OF THE11TH JUDICIAL CIRCUITIN AND FORMIAMI-DADE COUNTY FLORIDA

GENERAL JURISDICTION DIVISION

CASE NO. 08-78557 CA 24

JVP DRYWALL FINISH INC.

Plaintiff

V. THE ORIGINALFILED ON

CONSTRUCTION SOURCE LCJUL 2 $ ZOtOCLUB VENTURE IX LLC d/b/a

DAVID BARTON GYM SANDY LANEIN THE OFFICE OFRESIDENTIAL LLC and THE RONEY CIRCUIT COURT DADE CO F.PALACE CONDOMINIUM

ASSOCIATION INC.

Defendants

SANDY LANE RESIDENTIAL LLC

Counter-claimant

and Cross-claimant

V.

JVP DRYWALL FINISH INC. and

CONSTRUCTION SOURCE LC

Counter-defendant

and Cross-defendant

ANSWER AFFIRMATIVE DEFENSES COUNTERCLAIM AND CROSSCLAIMOF DEFENDANT SANDY LANE RESIDENTIAL LLC

COMES NOW Defendant SANDY LANE RESIDENTIAL LLC Sandy Lane by

and through its undersigned attorney and Answers the Amended Complaint filed herein as

follows

LAW OFFICES

BECKER POLIAKOFF P.A.

121 ALHAMBRA PLAZA 10TH FLOOR CORAL GABLES FL 33134

TELEPHONE 305 262-4433

1

CASE NO. 08-78557 CA 24

1. Sandy Lane admits that JVP DRYWALL FINISH INC. JVP is a Florida

corporation with its principal place of business in Miami-Dade County Florida Sandy Lane is

without knowledge as to the other allegations contained within paragraph 1 and therefore the

allegations that JVP is a licensed general contractor and in the drywall and construction business

that are contained within paragraph 1 of the Amended Complaint are denied.

2. Sandy Lane admits that CONSTRUCTION SOURCE LC Construction

Source or Contractor has its principal place of business in Miami-Dade County Sandy

Lane is without knowledge as to the other allegations contained within paragraph 2 and therefore

those remaining allegations contained within paragraph 2 of the Amended Complaint are denied.

3. Sandy Lane admits that it is a foreign limited liability corporation doing business

in Miami Beach Florida. Sandy Lane admits that it owns the property involved in the lawsuit.

Sandy Lane is without knowledge as to the remaining allegations contained within paragraph 3

and therefore those remaining allegations contained within paragraph 3 of the Amended

Complaint are denied.

4. Sandy Lane admits the portion of the allegations of paragraph 4 that this is an

action for damages of more than fifteen thousand dollars for jurisdictional purposes only. The

remaining allegations contained within paragraph 4 of the Amended Complaint are denied as

JVP failed to give three days notice before the filing of any lien as required by its contract with

CONSTRUCTION SOURCE LC.

5. Sandy Lane denies the allegations of paragraph 5 of the Amended Complaint.

6. Sandy Lane admits the portion of the allegations of paragraph 6 of the Amended

Complaint alleging that the Contractor was engaged by the property owner Sandy Lane to

make improvements. Sandy Lane is without knowledge as to the portion of the allegations of

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CASE NO. 08-78557 CA 24

paragraph 6 of the Amended Complaint alleging that the Contractor then subcontracted to the

Plaintiff to provide drywall and other related materials and labor at the property. The remaining

allegations contained within paragraph 6 of the Amended Complaint are denied.

COUNT ONE

Breach of Contract

7. - 9. The allegations in paragraphs 7 through 9 of the Amended Complaint are

directed solely to the Contractor and as such Sandy Lane is not required to respond to those

allegations.

COUNT TWO

Foreclosure of a Construction Lien

10. Sandy Lane adopts realleges and incorporates its responses to the allegations of

paragraphs 1 through 6 of the Amended Complaint as though fully set forth herein. Sandy Lane

admits the allegation that this is an action to foreclose a construction lien for jurisdictional

purposes only.

11. Sandy Lane admits the allegations of paragraph 11 of the Amended Complaint.



14. Sandy Lane admits the allegations of paragraph 14 of the Plaintiffs Amended

Complaintbut denies that the Claim of Lien and this action on it are validly brought by Plaintiff.




18. Sandy Lane admits the allegations of paragraph 18 of the Plaintiffs Amended

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ICASE NO. 08-78557 CA 24

Complaint but denies that the Claim of Lien and this action on it are validly brought by Plaintiff.

COUNT THREE

Unjust Enrichment

19. Sandy Lane adopts realleges and incorporates its responses to the allegations of

paragraphs 1 through 6 of the Amended Complaint as though fully set forth herein. Otherwise

the allegations of Paragraph 19 of the Amended Complaint are denied including the allegations

in paragraphs 8 and 9 of the Amended Complaint.



22. Sandy Lane denies each and every allegation of the Complaint which is not

specifically responded to herein.

CLAIM FOR ATTORNEYS FEES

23. Pursuant to Chapter 713 Florida Statutes the prevailing party in any litigation

brought under Chapter 713 is entitled to recover attorneys fees. Sandy Lane is entitled to an

award of its attorneys fees pursuant to Chapter 713.

24. Sandy Lane has retained Becker Poliakoff P.A. to represent it in this litigation.

Sandy Lane is obligated to pay Becker Poliakoff P.A. attorney fees for defending this lawsuit.

WHEREFORE Defendant SANDY LANE RESIDENTIAL LLC as the prevailing

party in this litigation requests the Court award it attorney fees from Plaintiff JVP DRYWALL

FINISH INC. as well as costs and such further relief as the Court deems appropriate.

AFFIRMATIVE DEFENSES

FIRST AFFIRMATIVE DEFENSE

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ICASE NO. 08-78557 CA 24

As and for its First Affirmative Defense Sandy Lane alleges that Sandy Lane is entitled

to recoupment or set off of the damages Sandy Lane has incurred against any claim of JVP

alleged in this lawsuit. Sandy Lanes damages include damage to other property resulting from

the faulty and non-conforming work on the drywall portion of the showers by JVP. This work

as performed by JVP was not in accordance with the project plans and specifications and the

minimumrequirements of the Florida Building Code.

SECOND AFFIRMATIVE DEFENSE

As and for its Second Affirmative Defense Sandy Lane alleges JVP has unclean hands

and is therefore barred from receiving any equitable relief. JVP misrepresentedcertain facts and

circumstances to Contractor and Sandy Lane including that the drywall portion of the showers

were constructed in accordance with the project plans and specifications and the minimum

requirements of the Florida Building Code when JVP knew or should have known they were not

so constructed. JVP made these representations with the intent of inducing Sandy Lane to make

certain payments to Contractor for JVPs work. In reasonable reliance upon the

misrepresentations Sandy Lane made such payments. As a direct and proximate result of

making payments for the defective work Sandy Lane has been damaged. As such JVP is

estopped from any recovery against Sandy Lane.

THIRD AFFIRMATIVE DEFENSE

As and for its Third Affirmative Defense Sandy Lane alleges JVP prepared its claim of

lien with willful exaggeration or gross negligence. JVP willfully or with such gross negligence

as to be tantamount to willfulness exaggerated the Claim of Lien by among other things failing

or refusing to give Sandy Lane an appropriate credit for work or materials not conforming to the

specifications of the project to improve the Property in accordance with JVPs contract with

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CASE NO. 08-78557 CA 24

Construction Source and the direct contract between Construction Source and Sandy Lane. The

damages sought by JVP in its Claim of Lien count exceed the value of JVPs improvement to the

property of Sandy Lane and therefore are excessive beyond those amounts allowed pursuant to

Chapter 713 of the Florida Statutes and constitute a fraudulent lien and constitute a slander of

title on Sandy Lanes property to the extent that such damages are beyond those allowed by

Chapter 713.

FOURTH AFFIRMATIVE DEFENSE

As and for its Fourth Affirmative Defense Sandy Lane alleges JVP has failed to meet all

conditions precedent to bringing an action against Sandy Lane including among others failure

to provide an adequate and timely Notice to Owner to Sandy Lane. Additionally JVP is only

entitled to a lien to the extent that JVP furnished labor services or materials in accordance with

its contract and with the direct contract between Sandy Lane and Construction Source LC

Construction Source or Contractor. JVP did not furnish labor services or materials in

accordance with its contract and with the direct contract.

FIFTH AFFIRMATIVE DEFENSE

As and for its Fifth Affirmative Defense Sandy Lane alleges JVP has an adequate

remedy at law and has failed to exhaust its remedies against the Contractor prior to proceeding

against Sandy Lane with its unjust enrichment claim and therefore JVP is not entitled to an

unjust enrichment claim.

SIXTH AFFIRMATIVE DEFENSE

As and for its Sixth Affirmative Defense Sandy Lane alleges that what is owed to JVP

under the contract with Construction Source for the work performed by JVP on this project to

improve the Property is less than the total cost to remediate and repair JVPs defective work

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CASE NO. 08-78557 CA 24

together with the related costs and expenses of protecting and then resetting each affected hotel

room. Such remediation and repair costs far exceed the balance claimed by JVP to be owed by

Sandy Lane under its contract with Construction Source.

Sandy Lane gives notice that it intends to rely upon such other affirmative defenses as

may become available or apparent during discovery and thus reserves the right to amend this

answer to assert any such defense.

COUNTERCLAIM

Defendant/Counterclaimant SANDY LANE RESIDENTIAL LLC Sandy Lane or

Owner by and through its undersigned attorney sues the Plaintiff/Counter-Defendant JVP

DRYWALL FINISH INC. JVPand alleges as follows

GENERAL ALLEGATIONS

1. This is an action for damages in excess of $15000.00 exclusive of interest costs

and attorneys fees.

2. Sandy Lane is the owner of improved property at 2301 Collins Avenue Miami

Beach Miami-Dade County Florida the Property.

A 3. JVP is a Florida corporation licensed by Miami-Dade County as a drywall

contractor which performed drywall work on the Property located in Miami-Dade County

Florida.

ý 4. Jurisdiction over JVP is appropriate in this Court because it is a Florida

corporation.

N. Venue is appropriate in this Court pursuant to Fla. Stat. Section 47.011 as the

cause of action accrued in Miami-Dade County.

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ICASE NO. 08-78557 CA 24

6. All conditions precedent to Sandy Lanes maintenance of this action have

occurred have been satisfied have been waived or excused or have been prevented by JVP from

being performed.

COUNT ONE

CLAIM FOR DAMAGES FOR FRAUDULENT

LIEN AGAINST JVP DRYWALL FINISH INC.

7. Sandy Lane readopts realleges and incorporates by reference the allegations of

paragraphs 1 through 6 as if fully set forth herein.

8. On October 3 2008 JVP recorded a Claim of Lien against the Property. The

Lien states that JVP furnished to the Property labor services and materials having a value of

$5355018.74. The Lien states there remains unpaid $443219.69. A copy of the Lien was

attached to the JVP Complaint as Exhibit C.

DO JVP willfully or with such gross negligence as to be tantamount to willfulness

exaggerated the Claim of Lien by among other things failing or refusing to give Sandy Lane an

appropriate credit for work or materials not conforming to the specifications of the project to

improve the Property in accordance with JVPs contract with Construction Source and the direct

contract between Construction Source and Sandy Lane.

10. The damages sought by JVP in its Claim of Lien count exceed the value of JVPs

improvement to the property of Sandy Lane and therefore are excessive beyond those amounts

allowed pursuant to Chapter 713 of the Florida Statutes and constitute a fraudulent lien.

11. JVPs Lien is fraudulent in that it was signed prepared filed and remains of

record in violation of Section 713.31 Florida Statutes in that among other things

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CASE NO. 08-78557 CA 24

A. the amount of the Lien was willfully or with such gross negligence as to be

tantamount to willfulness exaggerated and

B. the Lien does not include any credit for the work or material provided that did not

conform to the specifications for the project to improve the Property in accordance with JVPs

contract with Construction Source and the direct contract between Construction Source and

Sandy Lane.

If. Sandy Lane has sustained loss damage and injury due to JVPs filing the

fraudulent Claim of Lien including but not limited to

A. attorneys fees for the services of the undersigned attorneys in securing the

removal or release of the Lien and

B. court costs and other expenses of litigation in removing or releasing the Lien.

ID13. Pursuant to Section 713.31 Florida Statutes Sandy Lane is entitled to statutory

damages including punitive damages in an amount not exceeding the difference between the

amount claimed by JVP to be due or to become due and the amount actually due or to become

due.

D 14. Because of the filing of the fraudulent Lien Sandy Lane has been required to

retain the undersigned attorneys to represent it in this action and has agreed to pay its attorneys a

reasonable fee for which JVP is responsible pursuant to Chapter 713 Florida Statutes.

WHEREFORE Counterclaimant SANDY LANE RESIDENTIAL LLC demands

judgment against Counter-Defendant JVP DRYWALL FINISH INC. for actual damages

statutory damages including punitive damages interest costs and attorneys fees and such

further relief as the court deems appropriate.

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121 ALHAMBRA PLAZA 10TH FLOOR - CORAL GABLES FL 33134


sCASE NO. 08-78557 CA 24

COUNT TWOTHIRD-PARTY BENEFICIARY CLAIM FOR DAMAGES

FOR BREACH OF CONTRACTBY JVP DRYWALL FINISH INC.

15. Sandy Lane adopts realleges and incorporates by reference the allegations of


D 16. On or about September 30 2005 JVP as Subcontractor and Construction Source

LC as Contractor entered into a subcontract for JVP to perform certain framing and drywall

portions of the renovations to the building owned by Sandy Lane and located at 2301-2399

Collins Avenue Miami Beach Florida 33139 the Subcontract. A copy of the Subcontract

missing exhibits was attached to the Amended Complaint as Exhibit A.

17. The Subcontract at Article 18 - Identification of Third Party Beneficiary states

In consideration of the making of this Contract between Contractor and Subcontractor

Subcontractor hereby assigns to Owner its successors and assigns all of the Contractors

rights to and under this Contract.

18. Owner is identified on the first page of the Subcontract as Sandy Lane

Residential LLC.

P19. Under the Subcontract listed among the rights of Contractor are the rights that

a. Retainage amounts can be used by Contractor to cure performance failures

in materials or workmanship Last paragraphofArticle 5

b. Any work that is not performed in accordance with the plans and

specifications shall be removed and replaced and/or repaired. This shall

include issues of quality of workmanship that is standard practice in the

industry Article 13 Paragraph 6 and

c. The work included in this contract is to be done under the direction and to

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the satisfaction of the Contractor and the decision of Contractor as to the

true construction and meaning of the Plans and Specifications shall be

final.... Article 13 Paragraph 22.

20. JVP breached the Subcontract by among other things failing to perform the

Work in accordance with the Plans and Specifications more particularly JVP failed to install the

moisture membrane in front of rather than behind the drywall JVPs personnel installed drywall

screws in such a fashion that they penetrated through shower pans resulting in leaks and JVP

failed to ensure that concrete backer board Durock was used in the shower installations

instead of green board.

P 21. As a result of the breach of the Subcontract by JVP Sandy Lane has been

damaged in that showers in hotel rooms that were not constructed in accordance with the Plans

and Specifications have leaked and caused damaged to other property and have needed to bere-constructedto prevent a recurrence of such damage.

WHEREFORE Counterclaimant SANDY LANE RESIDENTIAL LLC demands

judgment against Counter-Defendant JVP DRYWALL FINISH INC. for damages interest

and costs and such further reliefas the court deems appropriate.

COUNT THREECLAIM FOR DAMAGES FOR NEGLIGENCE

BY JVP DRYWALL FINISH INC.



D 23. JVP had a duty to construct the showers and otherwise perform its work at the

Project in a good and workmanlike manner in keeping with the prevailing workmanship

standards for licensed drywall contractors engaged in providing similarwork in the Miami-Dade

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CASE NO. 08-78557 CA 24

County area.

P 24. JVP failed to use the reasonable care of a licensed drywall contractor engaged to

provide similar work in the area. These failures include JVPs failure to ensure that the drywall

installation for the showers met the requirements of the plans and specifications. Specifically JVP

failed to install the moisture membrane in front of rather than behind the drywall JVPs personnel

installed drywall screws in such a fashion that they penetrated through shower pans resulting in

leaks and JVP failed to ensure that concrete backer board Durock was used in the shower

installations instead of green board.

S 25. JVPs conduct as described herein constitutes negligence.

9 26. Due to JVPs failings many shower installations have already failed by leaking.

The leaks have resulted in water from these showers penetrating through room walls hallway walls

and ceilings. Thus JVPs negligence has caused damage to property other than JVPs work.

t 27. As a direct and proximate result of JVPs negligence Sandy Lane has been

damaged.

WHEREFORE Counter-claimant SANDY LANE RESIDENTIAL LLC demands

judgment against Counter-Defendant JVP DRYWALL FINISH INC. for damages in excess

of Fifteen Thousand and No/100 $15000.00 Dollars interest and costs of this action.

COUNT FOURCLAIM FOR DAMAGES FOR

VIOLATION OF BUILDING CODEBY JVP DRYWALL FINISH INC.

28. Sandy Lane readopts realleges and incorporates by reference the allegations ofl

paragraphs I through 6 as if fully set forth herein.

29. This is an action for violation of the Florida Building Code applicable in

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CASE NO. 08-78557 CA 24

Dade County Florida FBC brought pursuant to Section 553.84 of the Florida Building

Codes Act Sections 553.70 et seq. Florida Statutes.

V 30. JVP in violation of the FBC failed to construct the shower installations in

accordance with the minimumrequirements set forth in the FBC. The defects and deficiencies in

the shower installations include among other things violation of FBC paragraph R702.4.2 which

states that water-resistant gypsum board shall not be installed over a vapor retarder in a shower

or tub compartment and violation of FBC paragraph P2709.3 which does not permit screw holes

to penetrate a shower lining below the finished threshold.

D 31. As a direct and proximate result of the aforesaid violations Sandy Lane has

suffered substantial damages costs as well as consequential damages including but not limited

to damage to other property.

WHEREFORE Counter-claimant SANDY LANE RESIDENTIAL LLC demands judgment

against Counter-Defendant JVP DRYWALL FINISH INC. for damages costs and interest

and such further and other relief as the Court deems just and proper.

COUNT FIVE

SANDY LANES CLAIM FOR DAMAGES AGAINST JVPFOR CONTRACTUAL INDEMNITY



L/ 33. At Article 19 of the Subcontract JVP agreed to indemnify and hold harmless

Sandy Lane among others from and against

claims damages losses and expenses including but not limited to reasonable attorneys

fees arising out of or resulting from performance of the Work provided that such claims

damage loss or expense is attributable to bodily injury sickness disease or death or to

injury to or destruction of tangible property other than the Work itself including loss of

use resulting therefrom but only to the extent caused in whole or in part by

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CASE NO. 08-78557 CA 24

Subcontractor anyone directly or indirectly employed by them or anyone for whose acts

they may be liable regardless of whether or not such claim damage loss or expense is

caused in part by a party indemnified hereunder.

34. As a result of the negligent acts of JVP during performance of the Work Sandy

Lane has been damaged and suffered losses and expenses including reasonable attorneys fees

due to the no less than 35 shower installations that have already failed by leaking and caused the

need for repair to other property damaged by the leaks including room walls hallway walls and

ceilings as well as other related expenses due to loss of use of the rooms during repairs and need

to temporarily relocate and otherwise protect the furnishings of such rooms during repairs.

1 35. Sandy Lane has engaged Becker Poliakoff P.A. to represent and advise Sandy

Lane in connection with the problems resulting from JVPs defective work. Sandy Lane has paid

and continues to pay its attorneys Becker Poliakoff P.A. to advise it with respect to the

damages caused by the leaking showers and to represent it in this action.

\36. Pursuant to the indemnity agreement JVP must indemnify and hold Sandy Lane

harmless from the damages losses and expenses including reasonable attorneys fees Losses

to the extent such Losses were caused by or result from the actions or inactions of JVP.

WHEREFORE Counter-claimant SANDY LANE RESIDENTIAL LLC demands judgment

against Counter-Defendant JVP DRYWALL FINISH INC. for damages costs and interest

and such further and other relief as the Court deems just and proper.

CROSSCLAIM

Defendant/Counterclaimant/Crossclaimant SANDY LANE RESIDENTIAL LLC

Sandy Lane or Owner by and through its undersigned attorney sues the Cross-defendant

CONSTRUCTION SOURCE L.C. Contractorand alleges as follows

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CASE NO. 08-78557 CA 24

GENERAL ALLEGATIONS

37. This is an action for damages in excess of $15000.00 exclusive of interest costs

and attorneys fees.

38. Sandy Lane is the owner of improved property at 2301 Collins Avenue Miami

Beach Miami-Dade County Florida the Property.

39. Construction Source L.C. Construction Source or Manager is a Florida

limitedliability company which contracted with the Owner to perform construction work on the

Property located in Miami-Dade County Florida.

40. Jurisdiction over Construction Source is appropriate in this Court because it is a

Florida company.

41. Venue is appropriate in this Court pursuant to Fla. Stat. Section 47.011 as the

cause of action accrued in Miami-Dade County.

42. All conditions precedent to Sandy Lanes maintenance of this action have

occurred have been satisfied have been waived or excused or have been prevented by

Construction Source from being performed.

COUNT ONE

SANDY LANES CLAIM FOR DAMAGES AGAINST CONSTRUCTION SOURCE FORBREACH OF CONTRACT

43. Sandy Lane adopts realleges and incorporates by reference the allegations of


44. In 2005 Sandy Lane as Owner and Construction Source as Manager entered into

a construction management contract for Construction Source to perform certain renovations to

the building owned by Sandy Lane and located at 2301-2399 Collins Avenue Miami Beach

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CASE NO. 08-78557 CA 24

Florida 33139 the CM Contract. A copy of the unsigned CM Contract is attached to this

pleading as Exhibit A. Upon information and belief Construction Source has a signed copy of

this CM Contract.

45. Under the CM Contract among the duties of Construction Source a particular

duty was to perform the Work as defined in the CM Contract in accordance with the Drawings

and Specifications as defined in the CM Contract. Construction Source was allowed to utilize

subcontractors that were approved by Sandy Lane in the performance of the Work.

46. Construction Source breached the CM Contract by among other things failing to

cause JVP as a Sandy Lane-approved subcontractor to perform the Work in accordance with the

Drawings and Specifications.

47. As a result of the breach by Construction Source Sandy Lane has been damaged

in that showers in hotel rooms that were not constructed in accordance with the Drawings and

Specifications have leaked and caused damaged to other property and have needed to bere-constructedto prevent a recurrence of such damage.

48. Pursuant to Section 16 of the CM Contract the prevailing party is entitled to

recover all costs including reasonable attorneys fees.

49. Sandy Lane has agreed to pay its attorneys Becker Poliakoff P.A. to represent

it in this action.

WHEREFORE Cross-claimant SANDY LANE RESIDENTIAL LLC demands

judgment against Cross-Defendant CONSTRUCTION SOURCE LC for damages in excess of

Fifteen Thousand and No/100 $15000.00 Dollars interest attorneys fees and costs of this

action.

COUNT TWO

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SANDY LANES CLAIM FOR DAMAGES AGAINST CONSTRUCTION SOURCE FORCONTRACTUAL INDEMNITY



51. At Section 13 of the CM Contract Construction Source agreed to indemnify and

hold harmless Sandy Lane from and against

claims damages losses and expenses including but not limited to reasonable attorneys

fees arising out of or resulting from performance of the Work provided that such claims

damage loss or expense is attributable to bodily injury sickness disease or death or to

injury to or destruction of tangible property other than the Work itself including loss of

use resulting therefrom but only to the extent caused in whole or in part by negligent acts

or commissions sicof the Manager a subcontractor or materialman anyone directly or

indirectly employed by them or anyone for whose acts they may be liable regardless of

whether or not such claim damage loss or expense is caused in part by a party

indemnified hereunder.

52. As a result of the negligent acts of Construction Source and JVP during

performance of the Work Sandy Lane has been damaged and suffered losses and expenses

including reasonable attorneys fees due to the no less than 35 shower installations that have

already failed by leaking and caused the need for repair to other property damaged by the leaks

including room walls hallway walls and ceilings as well as other related expenses due to loss of

use of the rooms during repairs and need to temporarily relocate and otherwise protect the

furnishings of such rooms during repairs.

53. Sandy Lane has paid and continues to pay its attorneys Becker Poliakoff P.A.

to advise it with respect to the damages caused by the leaking showers and to represent it in this

action.

54. Pursuant to the indemnity agreement Construction Source must indemnify and

hold Sandy Lane harmless from the damages losses and expenses including reasonable

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attorneys fees Losses to the extent such Losses were caused by Construction Source or JVP.

WHEREFORE Cross-claimant SANDY LANE RESIDENTIAL LLC demands judgment

against Cross-Defendant CONSTRUCTION SOURCE LC for damages in excess of Fifteen

Thousand and No/100 $15000.00 Dollars interest and costs of this action.

COUNT THREESANDY LANES CLAIM FOR DAMAGES AGAINST CONSTRUCTION SOURCE FOR

COMMON LAW INDEMNITY



56. Sandy Lane has paid for the expenses including reasonable attorneys fees due to

the no less than 35 shower installations that have already failed by leaking and caused the need

for repair to other property damaged by the leaks including room walls hallway walls and

ceilings as well as other related expenses due to loss of use of the rooms during repairs and need

to temporarily relocate and otherwise protect the furnishings of such rooms during repairs.

57. Construction Source should have paid the expenses set forth in paragraph 56

above.

58. Sandy Lane is without fault in connection with the damages caused by the leaking

showers.

59. On account of the foregoing Sandy Lane is entitled to indemnification from

Construction Source.


against Cross-Defendant CONSTRUCTION SOURCE LC for damages in excess of Fifteen

Thousand and No/100 $15000.00 Dollars interest and costs of this action.

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CASE NO. 08-78557 CA 24

COUNT FOURSANDY LANES CLAIM FOR DAMAGES FOR NEGLIGENCE

BY CONSTRUCTION SOURCE



61. Construction Source as construction manager for the project and the holder of the

general contracting license under which the permits for the Work were obtained had a duty to

ensure that the showers were constructed in a good and workmanlike manner and in a manner in

keeping with the prevailing workmanship standards of licensed drywall subcontractors engaged

in providing similarwork in the Miami-area.

62. Construction Source failed to require JVP to use the reasonable care of a licensed

drywall contractor engaged to provide similar work in the area in that among other things

Construction Source failed to require the drywall installation for the showers to meet the

requirements of the Drawings and Specifications. Specifically Construction Source failed to cause

JVP to correctly install the moisture membrane in front of rather than behind the drywall

Construction Source allowed or failed to prevent JVPs personnel from screwing drywall screws in

such a fashion that they penetrated through shower pans resulting in leaks and Construction Source

failed to require JVP to use concrete backer board Durock in the shower installations instead of

green board.

63. Construction Sources conduct described in paragraph 50 above constitutes

negligence.

64. Due to Construction Sources failings many shower installations have already failed

by leaking. The leaks have allowed water to penetrate through room walls hallway walls and

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ceilings. Thus Construction Sources negligence has caused damage to property other than the

work of Construction Source or its subcontractor JVP.

65. As a direct and proximate result of Construction Sources negligence Sandy Lane

has been damaged.

WHEREFORE Cross-claimant SANDY LANE RESIDENTIAL LLC demands

judgment against Cross-Defendant CONSTRUCTION SOURCE LC for damages in excess of

Fifteen Thousand and No/100 $15000.00 Dollars interest and costs of this action.

COUNT FIVE

SANDY LANES CLAIM FOR DAMAGES FORVIOLATION OF BUILDING CODE BY CONSTRUCTION SOURCE



67. This is an action for violation of the Florida Building Code applicable inMiami-DadeCounty Florida FBCbrought pursuant to Section 553.84 of the Florida Building

Codes Act Sections 553.70 et seq. Florida Statutes.

68. Construction Source in violation of the FBC failed to cause the shower

installations to be constructed in accordance with the minimum requirements set forth in the

FBC. The defects and deficiencies in the shower installations include among other things

violation of FBC paragraph R702.4.2 which states that water-resistant gypsum board shall not be

installed over a vapor retarder in a shower or tub compartment and violation of FBC paragraph

P2709.3 which does not permit screw holes to penetrate a shower lining below the finished

threshold.

69. As a direct and proximate result of the aforesaid violations Sandy Lane has

suffered substantial damages costs as well as consequential damages including but not limited

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121 ALHAMBRA PLAZA 10TH FLOOR - CORAL GABLES FL 33134


CASE NO. 08-78557 CA 24

to damage to other property.


against Cross-Defendant CONSTRUCTION SOURCE L.C. for compensatory and

consequential damages costs and interest and such further and other relief as the Court deems

just and proper.

CERTIFICATE OF SERVICE

IFREBY CERTIFY that a true and correct copy of the foregoing was faxed and mailed

this d day of July 2010 to BRADSHAW LOTSPEICH Esquire 2225 Coral Way MiamiFL 33145 and LILIAN SREDNI Esquire 1400 N.E. Miami Gardens Drive Suite 208 North

Miami Beach FL 33179.


Attorneys for Defendant SANDY LANE121 Alhambra Plaza Tenth Floor

Coral Gables FL 33134

Telephone 305 262-4433

Telecopier 305 442-2232

E-Mail padairnbecker-poliakoff.com

bbacon crbecker-poliakoff.com

ByPERRY M. ADAIRFlorida Bar No. 434050

BELINDA A. BACONFlorida Bar No. 990140

ACTIVE S 11695/13636728618024

DRAFT 7/27/10 133 PM

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0 I

CONSTRUCTION MANAGEMENT CONTRACT

THIS CONSTRUCTION MANAGEMENT CONTRACT the Contract is made

as of the day of 2005 the Effective Date by and between SANDYLANE RESIDENTIAL LLC Owner and CONSTRUCTION SOURCE LC Manager.

WITNESSETH

WHEREAS Owner owns certain portions of a building the Building located at

2301-2399 Collins Avenue Miami Beach Florida 33139 known as The Roney Palace which

Building includes among other things two 2 towers the Hotel Tower and the Residential

Tower respectively some portions of which are either now or are expected to become units

Units in Roney Plaza Commercial Condominium the Condominium and

WHEREAS Manager is a licensed general contractor qualified to undertake and

complete the Project as hereinafter defined and

WHEREAS Owner and Manager desire for Manager to perform certain renovations to

the Building including but not limited to the Condominium common areas the Hotel Tower and

to certain Units and to portions of the residential condominium the Residential

Condominium which is located in the Residential Tower collectively the Project all on

terms and conditions as hereinafter set forth and to utilize the services of subcontractors

approved by Owner for all portions of the Project

NOW THEREFORE in consideration of the mutual promises contained herein the

sufficiency of which being hereby acknowledged Owner and Manager and Subcontractor agree

as follows

1. Recitals. The foregoing Recitals are true and correct.

2. Performance. Manager agrees to perform all of the obligations necessary for the

timely completion of the Project the Work utilizing subcontractors approved by Owner as

aforesaid. A simplified scope of the Work is attached hereto as Exhibit A.

3. Description of the Work. The Work is defined and described on those certain

drawings the Drawings by Stephen B. Jacobs Group the Architect dated

2005 which Drawings are generally described in Exhibit B attached hereto and which

Drawings are incorporated herein by reference. To the extent that any materials or specifications

are not fully described in the Drawings they are set forth or more fully described in ExhibitCattached and in the event of any conflict between the materials and specifications set forth

in Exhibit C and in the Drawings Exhibit C shall control. The parties recognize and

agree that the Drawings may be amended from time to time as the Work progresses and that the

term Drawings shall refer to such Drawings as they may be so amended.

EXHIBIT

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4. Managers Obligations. Managers obligations and to the extent applicable

each subcontractors obligations in connection with the Work include but are not limited to the

following

a Obtaining and paying for all building permits impact fees surveys

elevation certificates and similar permits licenses and fees necessary in connection with the

Project Permit Fees. Owner will reimburse Manager for such Permit Fees as have been

obtained and paid for by Manager along with and as part of the Cost Reimbursement provided

for in Section 6 below.

b Demolition of all existing improvements located within the Building and

necessary in connection with the Project as per a separate demolition plan provided or to be

provided by Architect. Manager recognizes and agrees that some demolition is currently being

undertaken by Diversified Demolition Subcontractor pursuant to a separate

agreement between Demolition Subcontractor and Owner the Demolition Subcontract and

that the Work does and will include such demolition and any and all other work being

performed by Demolition Subcontractor pursuant to the Demolition Subcontract and/or pursuant

to other agreements with Owner Existing Subcontracts as if the Existing Subcontracts had

been made between Manager and Demolition Subcontractor or any other subcontractor which is

a party to an Existing Subcontract.

c Execution of all of the Work described in the Drawings including but not

limited to furnishing and paying for all materials labor tools supervision equipment supplies

machinerywater power facilities protections trucking transportation and perform and pay for

all things necessary for and/or incidental to carrying out and properly performing the Work in

strict compliance with this Agreement the Drawings including specifications contained therein

and all addenda thereto and any written change orders and amendments hereafter agreed upon in

writing all of which are incorporated herein by this reference.

d Using Managers best efforts and requiring all subcontractors and

materialmen to use their best efforts to minimize intrusion to the Building and its occupants

during construction including sealing off areas of the Work when and as appropriate to

minimize dust and debris. The Manager shall at all times i store tools construction equipment

machinery and materials at locations designated by Owner for same and ii keep the area of

the Work and all surrounding areas free from accumulation of waste materials or rubbish caused

by operations under the Contract. At completion of the Work the Manager shall remove from

and about the Project waste materials rubbish the Managers tools construction equipment

machinery and surplus materials.

e Initiating maintaining and supervising all safety precautions and

programs in connection with the performance of the Contract. The Manager shall take

reasonable precautions for safety of and shall provide reasonable protection to prevent damage

injury or loss to i persons performing any part of the Work and other persons who may be

affected thereby ii the Work and materials and equipment to be incorporated therein and iii

other property at the site or adjacent thereto.

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f Cooperating and coordinating with Owners representatives andsub-contractorsengaged separately by Owner if any. Without limiting the foregoing Manager

shall provide Owner with a detailed weekly status report concerning the Work which has been

completed and which is expected to be performed over the ensuing week including but not

limited to a construction time line schedule of deliveries budget variance report etc. and shall

comply with all reasonable requests of Owner with respect to scheduling priorities i.e.

performing portions of the Work in certain areas of the Project as opposed to others.

g Supervising and directing the Work using the Managers best skill and

attention either by himself or through his authorized representative. The Manager shall be

solely responsible for and have control over construction means methods techniques and

procedures and for coordinating all portions of the Work under the Contract unless expressly

agreed to the contrary by Owner Contract and Architect.

h Enforcing strict discipline and good order among the Managers

employees and other persons carrying out the Contract. The Manager shall not permit

employment of unfit persons or persons not skilled in tasks assigned to them.

i Paying pay sales use and other similar taxes which are legally enacted

when bids are received or negotiations concluded whether or not yet effective or merely

scheduled to go into effect.

j Complying with and giving notices required by laws ordinances rules

regulations and lawful orders of public authorities bearing on performance of the Work and

promptly notifying the Architect and Owner if the Drawings and Specifications are observed by

the Manager to be at variance therewith

k The Manager shall be responsible to the Owner for the acts and omissions

of the Managers employees subcontractors materialmen and their agents and employees and

other persons performing portions of the Work under a contract with the Manager.

1 Reviewing approving and timely submitting to the Architect or Owner or

designer if appropriate shop drawings product data samples and similar submittals required in

connection with the Work with reasonable promptness the Work to be done in accordance with

approved submittals.

m The Manager shall be responsible for engaging subcontractors and

materialmen and other persons performing portions of the Work. To that end Manager will only

engage the most qualified and reasonably priced subcontractors and materialmen for the

appropriate phases of construction based on competitive bidding. Manager will provide Owner

of all requests for bids and with all bids which the Manager is prepared to accept. Manager will

not accept any bids and/or enter into any subcontract or any agreement with any materialman

without the prior consent of Owner which will not be unreasonably withheld or delayed.

Without limiting the foregoing no subcontractor or materialman will be engaged by Manager

except upon and with the prior approval of Owner. Further Manager recognizes and agrees that

Owner may direct and require Manager to utilize specific subcontractors and materialmen in

connection with the Project.

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n Manager will be responsible for closing out all open permits issued in

connection with the Project at its conclusion as a pre-requisite to Managers entitlement to the

Final Completion Bonus.

5. Contract Price. In consideration of Managers performance of the Work Owner

agrees to pay Manager i a monthly fee the Monthly Fee for the duration of the Project iia completion bonus the Floor Completion Bonus upon timely and satisfactory completion

of certain portions of the Project being floors in the Hotel Tower iii an amount to reimburse

Manager for all direct costs expended by Manager in connection with the Project the Cost

Reimbursementiv reimbursement to Manager for amounts paid by Manager for Managers

general liability and workmens compensation and other insurance in connection with the Project

the Insurance Reimbursementand v a final completion bonus the Final Completion

Bonus upon timely and satisfactory completion of the entire Project all on the following terms

and conditions

a The Monthly Fee will be $33500.00 per month payable in arrears on the

last day of each calendar month that Manager is performing Work pursuant to this Contract

prorated for any partial month.

i The Monthly Fee will be paid for no more than eighteen 18months even if the Project is not completed by that time. If the Project is not completed within

eighteen 18 months of the Effective Date Manager shall nonetheless complete its Worknotwithstanding the fact that Monthly Fee will not be paid for more than eighteen 18 months.

ii In consideration of payment of the Monthly Fee Manager shall at

all times until the Work and the Project are completed utilize and engage certain personnel in

connection with the Project as follows one 1 general project manager who at all times will be

Mendel Gorin or other individual acceptable to Owner in Owners sole discretion three 3project supervisors one of whom shall be Gilles Roy or other individual acceptable to Owner in

Owners sole discretion one 1 bookkeeper/purchasing agent one 1 secretary and one 1permitexpeditor who at all time will be Jeffrey Weloff or other individual acceptable to Owner

at Owners sole discretion all of whom will be qualified and experienced at their particular

functions and all of whom will devote all of their working time to the Project and to no other

Project whether for Manager or any other person or entity.

iii Other than the individuals who are specifically identified above

Manager shall provide Owner with the names and qualifications of all individuals to be

employed as provided above in advance of the date upon which such individuals begin their

efforts and Owner shall have the opportunity to interview and approve each such individual. If

for any reason at any point during the Project any individual engaged by Manager as set forth

above is not acceptable to Owner Manager shall promptly replace that individual with an

individual who is acceptable to Owner. Manager shall not discontinue the efforts of any

individual performing services to the Project after said individual has been approved by Ownerwithout Owners prior consent.

b The Cost Reimbursement will be paid as described in Sections 6 7 and 8

below. The Cost Reimbursement will be for an amount equal to the actual amount charged to

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Manager by subcontractors and materialmen plus reimbursement for all Permit Fees in both

cases without mark-up or increase.

c The Floor Completion Bonus will be paid in two 2 portions as follows

i As Manager completes each floor of the Project and for purposes

of this section and the Contract generally the floors will be in the Hotel Tower not in the

Residential Tower Manager will submit to Owner an invoice in the amount of $25000.00.

ii A floor will be deemed completed after all of the work to be

done on the particular floor has been completed to the reasonable satisfaction of Owner and the

Architect or the local architect rendering services to Owner and working under the aegis of

Architect the Local Architect and Owners representative Owners Representative

and has been approved and accepted by all applicable agencies who have signed off and

closed out any and all permits separately applicable to the floor and have issued a certificate

of completion or temporary certificate of completion for the floor. Without limiting the

foregoing in order to be complete a floor must be in move-incondition.

iii In addition to the foregoing when certain groups of floors have all

been completed Manager shall invoice Owner for additional payments as follows When all of

floors 3 through 6 have been completed Manager will invoice Owner in an amount equal to

$15000.00 per floor or $60000.00 when both of floors 7 and 8 have been completed

Manager will invoice Owner $15000.00 per floor or $30000.00 and when all of floors 9

through 17 have been completed Manager will invoice Owner $15000.00 per floor or

$135000.00.

iv Owner will pay all invoices properly submitted for payment of

Floor Completion Bonuses within thirty 30 days of submission.

d The Final Completion Bonus will be in the amount of $150000.00 and

shall be paid as follows

i The Final Completion Bonus will be due only after the Manager

has timely i.e. within eighteen 18 months of the Effective Date completed all of the Work

concerning the areas of the Project other than individual rooms and suites in the Hotel Tower

including but not limited to all lobby areas mezzanine spa back of house corridors and

amenities and the Work in the Residential Tower. Manager may be entitled to the Final

Completion Bonus even if Work applicable to certain Units has not been completed within

eighteen 18 months from the Effective Date.

ii That Work will be deemed completed when all portions of the

Project other than Work on individual Units has been completed to the reasonable satisfaction of

Owner and the Architect and Owners Representative and has been approved and accepted by

all applicable agencies who have signed off and closed out any and all permits separately

applicable said portions of the Project and have issued a certificate of completion or temporary

certificate of completion for each portion of the Project. Without limiting the foregoing in

order to be complete each area of the Project must be in move-in and fully useable

condition.

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iii Upon timely and satisfactory completion of the Work Manager

shall submit an invoice to Owner in the amount of $150000.00 which shall be paid by Owner

within thirty 30 days of submission.

e Owner will pay Manager the sum of $8000.00 per month for the

Insurance Reimbursement

i The amount to be paid for Insurance Reimbursement shall be

invoiced by Manager to Owner each month in arrears. Concurrently with each such invoice

Manager shall certify to Owner and provide other proof as reasonably required by Owner that

Manager has in place all of the insurance required by this Contract.

ii Owner will pay Manager the Insurance Reimbursement within ten

10 days of Owners receipt of the invoice for same along with the appropriate certification.

6. Interim Draw Requests Payments. The Cost Reimbursement shall be paid as

follows

a Manager shall submit requests for interim payments each a Draw

Request each month during the course of the Work

b The first Draw Request will be submitted for all Work through the last day

of 2005 and subsequent Draw Requests will be submitted for Work completed

through the last day of each month thereafter

c Each Draw Request will be submitted to Owner on or before the fifteenth

I5th day of the month following the month for which Draw Request seeks payment the

Work Month

d Each Draw Request shall include the following

i The certificate of Architect or the Local Architect Architects

Certificate certifying to Owner and Manager that all of the Work for which payment is sought

has been satisfactorily completed or if not identifying what portions of the Work have been

satisfactorily completed and which have not and certifying the amount of Work for which

Manager is eligible for payment.

ii Managers affidavit Managers Affidavit describing all of the

Work for which payment is sought affirming that all of such Work has been fully and correctly

performed and identifying all subcontractors and materialmen who have supplied services or

materials during the Work Month.

iii Partial or final if appropriate lien waivers from all subcontractors

and materialmen who supplied services and materials through end of the Work Month.

iv Copies of the actual invoices submitted by all subcontractors and

materialmen who supplied services and materials through the end of the Work Month for which

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Manager seeks to be reimbursed and copies of receipts for all Permit Fees for which Manager

seeks to be reimbursed.

e Each Draw Request will be for an amount equal to the actual amount

charged to Manager by subcontractors and materialmen for Work completed during the Work

Month LESS any portion of Work not approved by the Architect and/or Owners representative

and

f Owner shall make payment to Manager for each Draw Request within

fifteen 15 days of the date upon which Owner has received a complete Draw Request and the

Architects Certificate in an amount equal to the amount certified by the Architect as having

been satisfactorily completed the Approved Amount provided however that if lien

waivers supplied by Manager are conditioned upon payment payment checks issued by Owner

shall be made payable jointly to Manager and the appropriate subcontractor and/or materialmen.

7. Commencement Date Date of Substantial Completion. Manager agrees to

commence the Work within two 2 business days of the date of this Contract the

Commencement Date.

a Manager shall provide Owner with written notice prior to actual

commencement of the Work. Said notice shall specify the date upon which the Manager intends

actual commencement of the physical aspects of the Work mock-up floor. The Commencement

Date to start the rest of the Work shall begin two 2 days after the mock-up floor has been

approved in writing by Owner. In the event Owner desires to modify the scope of Work after

reviewing of the mock-up floor Owner shall be permitted to do so without increase to the

Contract Price except solely for increases in material cost due to such changes. Manager will

identify all subcontractors and individuals who Manager expects will be performing the Work.

b Manager will prosecute the Work diligently to completion. Without

limiting the foregoing the Work shall be substantially completed by Manager Substantial

Completion within eighteen 18 months of the Effective Date the Work Schedule. This

18-month time period includes time delays for Building Official Inspections. The Work will be

deemed to be substantially complete SubstantiallyComplete when all of the Work has been

completed other than so-called punch list itemsand the Work has been accepted and approved

by all governmental agencies having authority over same all permits for the Work have been

closed out and the Architect has certified to Owner and Manager that the Work is complete

except for items which the Architect deems to be punch list items.

c The Work will be deemed fully completed Full Completion when all

of the Work including but not limited to the so-called punch list items have been completed to

the reasonable satisfaction of Owner and the Architect.

8. Final Payment Final Draw Request. Final payment FinalPayment of any

other amounts remaining due and owing to Manager by Owner pursuant to this Contract shall be

made pursuant to a final request for payment the Final Draw Request.

a The Final Draw Request shall be accompanied by i all of the items

described in Section 6d above ii final lien waivers from all subcontractors and materialmen

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who supplied services and/or materials for the Project and who had not previously providedfinal lien waivers iiia Managers affidavit the Final PaymentAffidavit iv a Certificate

of Completion the Certificate of Completion of the Work issued by the appropriate

governmental agency v any and all warranties of third parties covering work and/or materials

included in the Work to the extent of materials not purchased directly by Owner and vi such

other documentation that the Work has been satisfactorily completed and all subcontractors and

materialmen paid in full as required by applicable law or otherwise reasonably requested byOwner or Architect.

b Owner shall make payment to Manager for the Final Draw Request theFinal Payment within fifteen 15 days of the date upon which Owner has received a

complete Final Draw Request provided however that if final lien waivers supplied by Manager

are conditioned upon payment payment checks issued by Owner shall be made payable jointly

to Manager and such subcontractor and/or materialmen.

c Owners making of the Final Payment shall not relieve Manager or each

subcontractor and/or materialman of obligations to correct non-conforming or defective or

punch-list or warranty work identified by Owner subsequent to such Final Payment if required

to be corrected by other provisions of the Contract.

9. Withholding. In the event that it should become apparent to Owner at any time

that any subcontractor sub-subcontractor materialman or laborer who is or may be entitled to

claim a lien for services performed or materials supplied in connection with the Project has not

been paid in full for such services and/or materials through the date for which any Draw Request

seeks payment Owner may withhold from any payment to be made thereunder an amount

sufficient to pay for such service and/or material plus ten percent 10% in addition to any and

all other rights and remedies provided for herein.

10. Change Orders. The Owner without invalidating the Contract may order

changes in the Work consisting of additions deletions or modifications each a ChangeOrder the Contract Price and Contract time being adjusted accordingly. Such changes in the

Work shall be authorized by written Change Order signed by the Owner Manager and Architect.

a The Contract Sum and Work Schedule shall be changed only by Change

Order.

b The cost or credit to the Owner from a change in the Work shall be

determined by mutual agreement.

11. Insurance. Manager shall purchase from and maintain insurance Insurance in

a company or companies lawfully authorized to do business in the State of Florida i for

protection from claims under workers or workmens compensation acts and other employee

benefit acts which are applicable ii claims for damages because of bodily injury including

death and iii from claims for damages other than to the Work itself to property which mayarise out of or result from the Managers operations under the Contract or by a subcontractor or

anyone directly or indirectly employed by any of them. This Insurance shall be written for not

less than limits required by law. Certificates of such Insurance indicating Owner and those

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entities identified on Exhibit D attached and such other entities as may be identified by

Owner from time to time as additional insureds and prohibiting cancellation or non-renewal

without at least thirty 30 days prior written notice to Owner shall be delivered to Owner prior

to the commencement of the Work. Without limiting the foregoing Manager shall maintain

general liability insurance and completed operations insurance in at least the amount of Five

Million Dollars $5000000.00 per occurrence without exclusory riders. Manager shall

furnish such additional insurance as reasonably required by Owner.

12. Managers Warranty. The Manager and as applicable each subcontractor and/or

materialman warrants to the Owner i that materials and equipment furnished under the

Contract will be of good quality and new ii that the Work will be free from defects not

inherent in the quality required or permitted and iii that the Work will conform to the

requirements of the Contract and Drawings. Work not conforming to these requirements

including substitutions not properly approved and authorized may be considered defective.

13. Indemnity. Manager and as applicable each subcontractor and/or materialman

shall and does indemnify and hold harmless the Owner from and against claims damages losses

and expenses including but not limited to reasonable attorneys fees arising out of or resulting

from performance of the Work provided that such claims damage loss or expense is

attributable to bodily injury sickness disease or death or to injury to or destruction of tangible

property other than the Work itself including loss of use resulting therefrom but only to the

extent caused in whole or in part by negligent acts or commissions of the Manager a

subcontractor or materialman anyone directly or indirectly employed by them or anyone for

whose acts they may be liable regardless of whether or not such claim damage loss or expense

is caused in part by a party indemnified hereunder.

14. Correction of Work. Manager and as applicable each subcontractor and/or

materialman shall promptly correct promptly correct Work rejected by the Architect or failing to

conform to the requirements of the Contract whether observed before or after Substantial

Completion and whether or not fabricated installed or completed and shall correct any Work

found to be not in accordance with the requirements of the Contract within a period of one 1year from the date of Substantial Completion of the Contract. The provisions of this Section

apply to Work done by or through subcontractors as well as to Work done by direct employees

of the Manager. Nothing contained in this Section shall be construed to establish a period of

limitation with respect to other obligations which the Manager might have under the Contract

and has no relationship to the time within which the obligation to comply with the Contract maybe sought to be enforced nor to the time within which proceedings may be commenced to

establish the Managers liability with respect to the Managers obligations other than specifically

to correct the Work.

15. Architects Review and Approval. The Architect will interpret and decide matters

concerning performance under and requirements of the Contract on written request of either the

Owner or Manager. The Architect will make initial decisions on all claims disputes or other

matters in questions between the Owner and Manager but will not be liable for results of any

interpretations or decisions rendered in good faith. The Architects decisions in matters relating

to aesthetic effect will be final if consistent with the intent expressed in the Contract and

Drawings. The Architect will have authority to reject Work which does not conform to the

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Contract Documents. The Architect will review and approve or take other appropriate action

upon the Managers submittals such as shop drawings product data and samples but only for the

limited purpose of checking for conformance with information given and the design concept

expressed in the Contract Documents.

16. Dispute Resolution Attorneys Fees Waiver of Jury Trial. In the event of any

dispute between the parties arising out of this contract a Dispute as a condition precedent to

the filing of any suit arising out of this Contract an Action the aggrieved party must offer in

writing to mediate the dispute a Mediation Notice and the parties must either mediate such

Dispute before a mediator upon whom they mutually agree or agree in writing to waive

mediation or fifteen days must pass from the date of the Mediation Notice without response by

the party to whom it is directed. The prevailing party in any Action shall recover all costs

including reasonable attorneys fees for trial and appeal. Owner and Manager and as

applicable each subcontractor expressly waive their right to trial by jury in any Action.

17. Venue and Choice of Law. This Contract shall be governed by and construed in

accordance with the laws of the State of Florida. Venue for any Action shall be in Miami-Dade

County Florida.

18. Entire Agreement Modification. This Contract embraces the entire

understanding and agreement between the parties and it is hereby agreed that this Contract

supersedes any negotiations between the parties and proposals heretofore submitted by the

Manager. This Contract may only be modified in writing and executed by the party to be bound

thereby. Any oral additions omissions modifications or waivers are expressly renounced and

excluded.

19. Termination or Suspension of Work. Work may be terminated or suspended as

follows

a If Owner fails to make a required payment thereon for a period of fifteen

15 days after any payment is due the Manager may upon seven 7 additional days written

notice to the Owner and the Architect terminate the Contract and recover from the Owner

payment for all Work executed through the date of termination and for proven loss with respect

to materials equipment tools and construction equipment and machinery including reasonable

overhead profit and damages applicable to the Project through date of termination.

b If the Manager and as applicable any subcontractor and/or materialman

defaults or persistently fails or neglects to carry out the Work in accordance with the Contract or

fails timely to perform a provision of the Contract the Owner after seven 7 days written

notice to the Manager and without prejudice to any other remedy the Owner may have maymake good such deficiencies and may deduct the cost thereof including compensation for the

Architects services and expenses made necessary thereby from the payment then or thereafter

due the Manager. Alternatively at the Owners option and upon certification by the Architect

that sufficient cause exists to justify such action the Owner may i terminate the Contract ii

take possession of the site and of all materials equipment tools and construction equipment and

machinery thereon owned by the Manager and iii finish the Work by whatever method the

Owner may deem expedient. If the unpaid balance of the Contract Price exceeds the costs of

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finishing the Work including compensation for the Architects services and expenses made

necessary thereby such excess shall be paid to the Manager but if such costs exceed such unpaid

balance the Manager shall pay the difference to the Owner.

c Anything contained herein to the contrary notwithstanding Owner shall be

entitled to terminate the Contract for any reason by giving Manager thirty 30 days notice of

same and Early Termination Notice. In the event that Owner terminates the Contract

pursuant to this subsection Owner will pay Manager for all of the Work completed through the

termination date including but not limited to a prorated portion of the fees and bonuses

described in subsections 5a through 5e above.

SIGNATURE PAGE FOLLOWS

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IN WITNESS WHEREOF Owner and Manager have caused this Contract to be signed

in counterparts with each effective as an original effective as of the Effective Date.

Signed Sealed and Delivered OWNERin the presence of

SANDY LANE RESIDENTIAL LLC

ByPrint Name Name

Title

Print Name

MANAGER

CONSTRUCTION SOURCE LC

ByPrint Name Name

Title

Print Name

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EXHIBIT ASIMPLIFIED SCOPE OF WORK

The Managers roles and responsibilities are as follows

The Design Phase includes the following activities and responsibilities

1. Provide Owner a preliminary budget with schematic plans and provide

estimated schedules of completion. Update every month

2. Prepare with Owners Architect the design package for the local

architectural design.

3. Assist Owner in the bidding of complete and coordinated full architectural

and engineering set of plans.

4. Coordinate all communications with local architect.

5. Review all plans produced by Owners Architect and engineer and assist

the Architect in obtaining the relevant local authorities approval.

The Pre-Construction Phase includes the following activities and responsibilities

1. Review the design documents and tender package for construction.

2. Examine and approve along with Owner the subcontractors bids. The

bidding process will entail the obtaining of at least three bids per trade for

each trade that is significantly involved in the project.

3. Acquire and maintain Insurance Certificates from each and every trade

involved in the Project. Each subcontractor is required to maintain general

liability and workmens compensation insurance.

4. Address and present any documents required by Owner.

5. Provide a schedule of cost breakdown as required by Owner.

6. Develop subject to Owner approval a critical path time-line with a target

date ofjob completion.

7. Recommend to Owner the most qualified and reasonably-priced

subcontractor for each phase of construction based on the bids submitted.

With the written approval of Owner Manager will sign all contracts with

subcontractors. Each subcontract must contain the acknowledgment and

agreement of the subcontractor as to the matters described in Sections 12

13 and 14 of the Contract.

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8. Review the Contract documents with each subcontractor confirming a

complete scope of Work.

9. Process all Notices to Owner Partial Releases of Lien and Final

Releases of Lien from all subcontractors and materialmen.

10. Develop a list of contract addenda covering areas of payment

disbursement safety workers compensation clean-up and craftsmanship

standards.

11. In collaboration with Owners Architect Manager shall review and

approve shop drawings product data samples requests for clarification

and other submittals making such that all are responded to in a prompt

manner.

12. Manager will use its best efforts to eliminate all open permits.

13. All permitfees will be billed at cost to Owner without mark-up.

The Construction Phase includes the following activities and responsibilities

1. Be Owners eyes and ears in the field every day through periodic

inspections.

2. Meet with Owner on a regular basis to review the progress of the Project

and to keep owner advised as to the status of the Project.

3. Supervise construction progress making sure that the Project is proceeding

as intended by Owner schedule and budget and as per design plans.

4. Insure that subcontractors working on the project maintain a high degree

of craftsmanship consistent with other high end projects in the area.

5. Review and enforce scheduling.

6. Actively review and maintain insurance certificates provided by

subcontractors making sure that insurance coverage does not lapse.

7. Review negotiate recommend and approve change orders after receiving

approval from Owner.

8. Verify the quantity and quality of material being used on the Project.

9. Authorize each subcontractors applications for payment based upon

ongoing review.

10. Coordinate all work with Architect Owners Representative and any and

all other agents and professionals representing Owner.

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11. Act as Owners agent in handling inspections with the Building

Departments. Manager will then report results to Owner.

12. Be responsible for all site safety issues.

13. Obtain final certificates of occupancy or certificates of completion as

applicable.

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EXHIBIT BDRAWINGS

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EXHIBIT CMISCELLANEOUS MATERIALS AND SPECIFICATIONS

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EXHIBIT DLIST OF INITIAL ADDITIONAL INSUREDS

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