Writing for a panel that also included Circuit Judges Newsom and Brasher, Circuit Judge Tjoflat opened the 49-page opinion with a characterization of the dispute: "Not all ventures strike gold; some strike sinkholes."
The dispute arose from the I-4 Ultimate Project, a reconstruction of a 21-mile stretch of Interstate 4 structured as a public-private partnership. Skanska, Granite Construction Company, and Lane formed a joint venture called SGL, with Skanska holding 40% and Granite and Lane each holding 30%. SGL won the contract with a $2.3 billion bid projecting $255 million in profit.
Hurricanes, a labor shortage, inflation, and a sinkhole that SGL "couldn't find the bottom" of pushed losses above $500 million by the 2023 bench trial, according to the opinion.
Lane proposed that SGL send a "Termination Request" that, under a disputed contract provision, would allegedly allow it to escape its construction obligations. Skanska and Granite rejected the plan after outside counsel at Holland & Knight said it would be "reckless" and confirmed that the key provision contained a "scrivener's error." Lane sued Skanska for breach of fiduciary duty and stopped making mandatory capital contributions.
After a ten-day bench trial, the Middle District of Florida ruled that Skanska had not breached any fiduciary duty and ordered Lane to pay $49 million to Skanska and $30 million to Granite. Choosing to negotiate with the state rather than send the termination request was "a no-brainer, not a breach," the trial court wrote.
The Eleventh Circuit affirmed the contract judgment, calling Lane's capital-call argument "unsupportable" and holding that the joint venture's indemnity provisions "beyond any shadow of a doubt, require Lane to indemnify Skanska and Granite for its intentional breach." The panel also upheld prejudgment interest at Florida's statutory rate.
On the fiduciary duty claim, the panel affirmed on different grounds. It held that Florida's Revised Uniform Partnership Act governs SGL and that Lane failed to show Skanska acted "as or on behalf of" a party with interests adverse to the partnership. Steven Lunsford, Skanska's in-house counsel, testified that Skanska and its sister company Skanska ID, which owned half of the project's concessionaire, were "separate companies with different cultures, different corporate structures, and different management," and Skanska USA General Counsel Michael DiPaolo testified that the relationship between them was "acrimonious."
The panel also flagged an unanswered question about Florida partnership law. The district court had written that "whether there was actually a conflict is of no moment because the dispositive question is whether Skanska [] acted on that conflict to Lane's detriment." The Eleventh Circuit said that holding was "difficult to square with the plain language of FRUPA," which appears to make the conflict itself actionable. Whether Florida recognizes a common-law "fairness defense," as Delaware and other states do, remains unresolved, and the panel declined to decide the issue because Lane's claim failed at the threshold.
The court observed that "given the sheer magnitude of the joint venture and Skanska's looming potential conflict known from the very beginning, it is surprising the JVA failed to even conceive of a conflict, let alone institute safeguards." Florida law permits partnership agreements to carve out categories of conduct from the duty of loyalty, but SGL's agreement did not do so.