Key Points

  • The Fourth District affirmed a judgment requiring GSD Contracting to pay subcontractor All American Builders & Debris Removal a $71,582.98 retainage after GSD terminated it from a hotel project.
  • The court held that the subcontract made retainage payable 90 days after final completion of the project and entitled a subcontractor terminated for convenience to payment for work performed through termination.
  • Because the subcontract contained no termination-for-cause provision, GSD had no contractual basis to withhold the retainage based on All American's alleged default, and a footnote said the analysis could differ if such a provision existed.
  • The court reversed $45,300 awarded for unperformed work, which All American never sought and which section 16.6 of the subcontract barred.
  • The court did not decide whether GSD also breached the subcontract by failing to remediate mold, and it remanded for entry of a corrected final judgment.

A Florida appeals court held Wednesday that a general contractor that fired its subcontractor before a hotel job was finished must still pay the subcontractor $71,582.98 in retainage. The court ruled that the parties' subcontract gave the contractor no right to keep that money after ending the relationship.

Florida's Fourth District Court of Appeal affirmed that part of a Broward County judgment in favor of All American Builders & Debris Removal Inc. and against GSD Contracting LLC. Judge Levine wrote the opinion, and Judges Klingensmith and Lott concurred. The panel reversed a further $45,300 that the trial court had awarded for work All American never performed, an amount All American conceded it had never sought.

The ruling turns on a clause the subcontract lacked. The contract let GSD terminate for convenience, meaning without cause and at its own discretion, but it had no termination-for-cause provision allowing GSD to end the deal over a subcontractor's default. Without such a clause, the court held, GSD could not withhold earned retainage on the theory that All American had defaulted. In a footnote, the court wrote that "Our analysis could be different if there was a provision for cause in the contract, thus allowing the party to terminate based upon such proof."

All American was hired to install framing, drywall, insulation and acoustical ceiling tiles on a five-story hotel. GSD came onto the project as the replacement general contractor after the original general contractor was terminated. By the time GSD took over, All American had completed approximately 93.9% of its contractual work and was owed $71,582.98 in retainage. According to the opinion, All American had not finished because other trades needed to complete their work first.

Before the work was completed, the project suffered from significant mold issues caused by water intrusion. All American refused to finish the remaining work unless the mold was properly remediated to protect its workers. GSD said it had done enough by removing certain areas of drywall and completing limited mold testing. All American considered those efforts insufficient because GSD never hired an industrial hygienist or prepared a formal remediation plan.

GSD ultimately terminated All American from the project and never paid the retainage for work already performed. All American sued GSD for breach of contract, seeking the $71,582.98. At trial, All American's owner testified that the company was seeking to recover only the retainage and was not seeking the $45,300 for unperformed work.

Judge John B. Bowman found that GSD breached the subcontract in two ways, by failing to pay All American for work performed and by failing to properly remediate the mold as an exhibit to the subcontract required. The trial court then awarded All American $116,882.98, the retainage plus the $45,300 for unperformed work. GSD appealed, arguing that the trial court erred in finding that GSD breached the subcontract.

The appeals court reviewed the contract's meaning de novo. Quoting its 2025 decision in Flaim v. Flaim, the court wrote that "Where the language of a contract is clear and unambiguous, the court can give to it no meaning other than that expressed."

Two provisions of the subcontract decided the retainage question. Section 11.3 provided that 10% of each partial payment "shall be retained . . . until ninety (90) days after the final completion of the Project." The hotel was completed in 2023, so "the 90-day period has long since expired, making the $71,582.98 retainage immediately payable," Judge Levine wrote. Section 16.6, the termination-for-convenience clause, provided that All American "shall be entitled to recover its partial and final payment for all Subcontract Work performed through the date of termination."

Read together, the court said, the two sections fixed when the retainage came due and preserved All American's right to it after termination. "Nothing in the subcontract provides that GSD may thereafter withhold the retainage based on an alleged default by All American," Judge Levine wrote. "Thus, the subcontract provides no contractual basis for GSD to keep the $71,582.98 retainage."

The panel declined to decide whether GSD also breached the contract through its handling of the mold. Because the nonpayment breach supported the judgment on its own, the court wrote that it "need not reach the merits of whether GSD in fact also breached the subcontract by failing to sufficiently remediate the mold" issue. The court cited its 1986 decision in Kelley v. Mutnich for the rule that a judgment resting on several grounds should be affirmed if the record supports any one of them.

The $45,300 award fared differently. The court noted that All American's complaint sought only $71,582.98 for the unpaid retainage and that its owner testified to seeking only the retainage. The court also pointed to the subcontract itself, which provided in section 16.6 that a subcontractor terminated for convenience shall not "be entitled to payment for any Subcontract Work not performed, including profit that would have been realized on the Work not yet performed."

GSD was represented by Andrew V. Cobbe of Soto Law Group, P.A. All American was represented by Wayne R. Atkins of Xander Law Group, P.A.

The appeals court sent the case back to the Broward County circuit court with instructions to enter a final judgment consistent with its opinion, which leaves All American with the $71,582.98 retainage award. The opinion states that it is not final until the court disposes of any timely-filed motion for rehearing.