Legal Memorandum: Payment Bonds in FL

Issue: Is a Payment Bond Is Considered a ‘Common Law’ Payment Bond according to Section 255.05 of the Florida Statutes?

A “common law bond” is simply defined.  “The term ‘common law bond’ still means, as it always has meant, a bond where protections exceed the minimum obligations imposed by statute.”  Martin Paving, 646 So. 2d at 270; see State, Dep’t of Transp. ex rel. Consolidated Pipe & Supply Co.v. Houdaille Indus., Inc., 372 So. 2d 1177, 1178 (Fla. 1st Dist. Ct. App. 1979); Florida Keys Community College v. Insurance Co. of N. Am., 456 So. 2d 1250, 1252 (Fla. 3d Dist. Ct. App. 1984).  So, even though a bond is furnished pursuant to a public works project, it will be construed as a common law bond simply because its provisions are more expansive than those required by § 255.05.  See id.; Southwest Florida Water Management Dist. ex rel. Thermal Acoustic Corp.v. Miller Constr. Co., 355 So. 2d 1258, 1259 (Fla. 2d Dist. Ct. App. 1978).

Thus, it is a relatively simple matter to determine whether a given bond is a “statutory” or “common law bond”: compare the terms of the bond with the statute’s minimal requirements. Fla. Stat. § 255.05 (1993).

When, the class of claimants that may be benefited by the bond are more expansive than minimally required by the statute, it is deemed particularly significant and strongly militates in favor of a determination that the bond is a common law bond.  See Southwest Florida Water, 355 So. 2d at 1260.

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