HomeMy WebLinkAbout2007 12 10 Regular 605 Notice of Default and Claim againist Lexon Insurance Surety Bond No: 1003690
COMMISSION AGENDA
ITEM 605
Consent
Informational
Public Hearing
Regular X
Add-On
December 10. 2007
Meeting
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Mgr. /
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Att. /
Dept.
REQUEST:
The City Attorney's Office requests the City Commission to authorize the filing of a Notice of
Default and Claim against Lexon Insurance Surety Bond No: 1003690, ensuring the completion of
work for subdivision improvements in Jesup's Reserve Subdivision.
PURPOSE:
The purpose of this agenda item is to allow the City Attorney's office to file a claim against a
performance surety bond purchased by Levitt & Son's of Seminole County, LLC, for which the City
of Winter Springs is the beneficiary; undertaken to ensure the completion of subdivision
improvements in Jesup's Reserve subdivision.
APPLICABLE LAW AND PUBLIC POLICY:
1. Florida Municipal Home Rule Authority, Chapter 166, Florida Statutes
2. Surety Performance Bond No.: 1003690
CONSIDERATIONS:
1. On August 8, 2005, the City of Winter Springs approved final development plans for the
establishment of Jesup's Reserve Townhomes.
Page I of 2
2. In consideration of the approval, the City required Levitt to purchase a Performance Surety
Bond to ensure completion of the development, in the event Levitt could not complete the
construction.
3. In October, 2007, Levitt closed construction on Jesup's Reserve and filed for bankruptcy,
leaving portions of the common property incomplete, exposed, unsafe, and otherwise
contrary to the health, safety, and welfare of the community.
4. The City has identified the portions ofthe plans for which Levitt has not completed, and is
believed to be covered by the Performance Surety Bond. The total cost for completion as
estimated by the City Engineer is approximately $222,500.00, significantly less than the
maximum bond coverage, in the amount of$I,865,021.68. The City Attorney's Office has
contacted the bond company to inquire about the proper legal procedure for filing a claim.
5. On November 27,2007, Levitt and Son's received court approval to abandon certain property
mortgaged by Bank of America, including J esup' s Reserve property. This order removes the
property from the bankruptcy estate and allows for Bank of America to foreclose on their
mortgage. However, at this time, we are unaware ofthe time frame for the foreclosure, and
whether the property will be completed by the next owner.
6. Filing a claim against the surety bonds for the completion of Jesup's Reserve Townhomes
will require the Surety to begin completion of the subdivision improvements within sixty
(60) days of the Notice of Default and Claim, or will allow the City legal recourse ifthe City
is forced to complete the improvements without assistance from the Surety.
STAFF RECOMMENDATION:
Approve the City Attorney's Office request to file a Notice of Default and Claim against the Lexon
Insurance Surety Bond No.: 1003690 for the completion of subdivision improvements detailed in
the Final Development Plans for J esup' s Reserve.
ATTACHMENTS:
Lexon Insurance Surety Bond No.: 1003690
City Engineers Estimate for Completion
Bankruptcy Court Order Removing the Property from the Bankruptcy Estate
COMMISSION ACTION:
Page 2 of 2
; ~ ""
SURETY PERFORMANCE BOND
Subdivision Improvements
Levitt and Sons of Seminole County. LLC
Bond No. 1003690
KNOW ALL MEN BY THESE PRESENTS, that, LEVITT AND SONS OF
SEMINOLE COUNTY, LLC, hereinafter referred to as "Principal" and Lexon Insurance
Companv 10002 Shelbyville Road, Suite 100, Louisville, KY 40223, hereinafter referred to as
"Surety", are held and firmly bound unto the CITY OF WINTER SPRINGS, a Florida
municipal corporation hereinafter referred to as the "City", in the penal sum of ONE MILLION
EIGHT HUNDRED SIXTY.FIVE THOUSAND TWENTY-ONE AND 68/100 DOLLARS
($1,865,021.68) (equal to the amount of the engineer's estimate for the work to be performed) to
provide for the construction of the improvements as shown on the final development plan, the
payment of which we bind ourselves, our heirs, executors, successors and assigns, jointly and
severally, firmly by these presents.
WHEREAS, Principal has agreed as a condition of final subdivision approval to construct
the following improvements, to wit: landscaping and hardscape and other improvements, within
the JESUP'S RESERVE subdivision.
NOW, THEREFORE, the condition of this obligation is such that if Principal shall
promptly and faithfully perform said Agreement and complete the improvements herein
described within time provided by the Agreement, then this obligation shall be null and void,
otherwise, it shall remain in full force and effect.
If the Principal shall be declared in default of said Agreement by the City, the Surety
shall have sixty (60) days from the date of said default within which to take whatever action it
deems necessary in order to ensure performance under the Agreement. If, at the expiration of
sixty (60) days from the date of said default, no arrangements have been made by the Principal or
Surety satisfactory to the City for the completion of the work contemplated herein and on the
final development order, then the City shall have the right to provide for the work and the
Principal and Surety, jointly and severally, shall pay all costs incurred by the City in the
completion of the work, including, but not limited to, purchasing, constructing, planting legal
and other costs, together with any damages, either direct or consequential, which the City may
sustain on account of the Principal's default of said Agreement. After the expiration of the
aforesaid grace period, the City shall have the additional right to contract for the completion of
said Agreement upon which the Principal has defaulted and upon the City's acceptance of the
lowest responsible bid for the completion of said Agreement, the Principal and Surety shall
become immediately liable for the amount of said bid and, in the event the City is required to
commence legal proceedings for the collection thereof, interest shall accrue at the rate of six
i::CE~VED
SEP 2 9 2005
CllY OF WINlER SPRINGS
Ptlfmil\ing . Kim
(6%) per cent per annum, beginning with the commencement of such legal proceedings. The
City, in its discretion, may permit the Surety to complete said contract, in the event of Principal's
default.
In the event the city commences suite for the collection of any sums due hereunder, the
obligors and each of them agree to pay all costs incurred by the City, including attorney's fees.
EXECUTED this
30th day September
.2005.
LEVITI AND SONS OF SEMINOLE COUNTY, LLC
c- /ff~
Harry T. Sleek, Sr. Vice President
By:
LEXON INSURANCE COMPANY
By: ~ y:~.
Sandra F. Harper Attorney-in-Fact
POWER OF ATTORNEY
Lexon Insurance Company
LX-014440
KNOW ALL MEN BY THESE PRESENTS, that LEXON INSURANCE COMPANY, a Texas Corporation, with its principal office in
Louisville, Kentucky, does hereby constitute and appoint:
John B. Manus, Mary E. Joseph, Megan Kaelin, Tammy Masterson, Brook T. Smith
Kathy Hobbs, Raymond M. Hundley,Jason D. Cromwell, James H. Martin, Sandra F. Harper, Myrtie F. Henry.Julie Radican
its true and lawful Attorney(s)-In-Fact to make, execute, seal and deliver for, and on its behalf as surety, any and all bonds, undertakings or
other writings obligatory in nature of a bond.
This authority is made under and by the authority of a resolution which was passed by the Board of Directors of LEXON
INSURANCE COMPANY on the 1st day of July. 2003 as follows:
Resolved, that the President of the Company is hereby authorized to appoint and empower any representative of the Company or
other person or persons as Attorney-In-Fact to execute on behalf of the Company any bonds, undertakings, policies, contracts of indemnity
or other wrilings obligatory in nature of a bond not to exceed $2.500,000.00, Two-million five hundred thousand dollars, which the Company
might execute through its duly elected officers, and affix the seal of the Company thereto. Any said execution of such documents by an
Attorney-ln.Fact shall be es binding upon the Company as if they had been duly executed and acknowledged by the regularly elected
officers of the Company. Any Attorney-In-Fact, so appointed, may be removed for good cause and the authority so granted may be revoked
as specified in the Power of Attorney.
Resolved, that the signature of the President and the seal of the Company may be affixed by facsimile on any power of attorney
granted, and the signature of the Vice President, and the seal of the Company may be affixed by facsimile to any certificate of any such power
and any such power or certificate bearing such facsimile signature and seal shall be valid and binding on the Company. Any such power so
executed and sealed and certificate so executed and sealed shall, wllh respect to any bond of undertaking to which It is attached. continue
to be valid and binding on the Company.
IN WITNESS THEREOF, LEXON INSURANCE COMPANY has caused this instrument to be signed by its President, and its
Corporate Seal to be affixed this 2nd day of July, 2003.
LEXON INSURANCE COMPANY
BY
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.
David E. Campbell
President
ACKNOWLEDGEMENT
On this 2nd day of July, 2003, before me, personally came David E. Campbell to me known, who being duly sworn, did depose and
say that he is the President of LEXON INSURANCE COMPANY, the corporation described in and which executed the above instrument; that
he executed said instrument on behalf of the corporation by authority of his office under the By-laws of said corporation.
------.'OfRCIAl SEAL'
L VOlA J. DEJONG
NOTARY PUBlIC STATE OF Uf<<llS
MY COMMISSiON EXPIRES 1/17J2007
CERTIFICATE
c:{~ 1 L?-9J
Lydia J. Dejong
Notary Public
I, the undersigned. Secretary of LEXON INSURANCE COMPANY. A Texas Insurance Company. DO HEREBY CERTIFY that the
original Power of Attorney of which the foregoing is a true and correct copy. is in full force and effect and has not been revoked and the
resolutions as set forth are now In force.
Signed and Sealed at Lombard. illinois this JJ~;t::;,fv Day of ~o 0 S
OJ fJ ~
Donald D. Buchanan
Secretary
Case 07-19845-RBR Document 236 Filed 11/29/2007 Page 1 of 3
11/~~/O~
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Uaieed Stales Bankruptcy Court
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF FLORIDA
FORT LAUDERDALE DIVISION
www.f1sb.uscourts.gov
In re:
Chapter 11 Cases
R&-
Case No. 07-19845-BKC-Jtte
LEVITT AND SONS, LLC,
a Florida limited liability company, et atl
Jointly Administered
Debtors.
/
ORDER GRANTING DEBTORS' MOTION FOR AUTHORITY
TO ABANDON PROPERTY OF THE ESTATE SUBJECT
TO A LIEN HELD BY BANK OF AMERICA. N.A.
I The last four digits of the taxpayer identification number for each of the Debtors follows in parentheses: (i) Levitt and Sons,
LLC (3500); (ii) BankAtlantic Venture Partners 5, LLC (7328), (iii) Bellaggio by Levitt and Sons, LLC (8507); (iv) Levitt GP,
LLC (9466), (v) Levitt Construction Corp.-East (6292); (vi) Levitt Construction-East, LLC (2487); (vii) Levitt Industries, LLC
(6273), (viii) Levitt Homes Bellaggio Partners, LLC (9490), (ix) Levitt Homes, LLC (1650); (x) Avalon Park by Levitt and Sons,
LLC (2188); (xi) Levitt and Sons of Lake County, LLC (8547); (xii) Levitt and Sons of Manatee County, LLC (3563); (xiii)
Levitt and Sons of Hemando County, LLC (1563); (xiv) Regency Hills by Levitt and Sons, LLC (9482); (xv) Levitt and,Sons at
Hunter's Creek, LLC (5870); (xvi) Levitt and Sons of Seminole County, LLC (1888); (xvii) Levitt and Sons of Osceola County,
LLC (4596); (xviii) Levitt and Sons of Lee County, LLC (1561); (xix) Cascades by Levitt and Sons, LLC (2022); (xx) Levitt and
Sons at Hawks Haven, LLC (4963); (xxi) Magnolia Lakes by Levitt and Sons, LLC (5370); (xxii) Levitt and Sons at Tradition,
LLC (9053); (xxiii) Levitt and Sons at World Golf Village, LLC (4959); (xxiv) Levitt and Sons of Flagler County, LLC (0685);
(xxv) Lev-Bm, LLC (3445); (xxvi) Summerport by Levitt and Sons, LLC (3494); (xxvii) Levitt and Sons of Georgia, LLC
(9568); (xxviii) Levitt and Sons of Cherokee County, LLC (2322); (xxix) Levitt and Sons of Hall County, LLC (4416); (xxx)
Levitt and Sons of Paulding County, LLC (1632); (xxxi) Levitt Construction Georgia, LLC (3043); (xxxii) Levitt and Sons of
South Carolina, LLC (8109); (xxxiii) Levitt and Sons of Harry County, LLC (3186); (xxxiv) Levitt Construction - South
Carolina, LLC (3234); (xxxv) Levitt and Sons ofTennessee, LLC (4793); (xxxvi) Bowden Building Corporation (6090); (xxxvii)
Levitt and Sons of Nashville, LLC (0295); and (xxxviii) Levitt and Sons of Shelby County, LLC (1345). The mailing address for
the Debtors is 2200 West Cypress Creek Road, Fort Lauderdale, FL 33309.
870957-2
Case 07 -19845-RBR Document 236 Filed 11/29/2007 Page 2 of 3
THIS MATTER having corne before the Court on the 27th day of November, 2007 at
1 :30 p.m. in Fort Lauderdale, Florida, upon the Motion for Authority to Abandon Property of the
Estate Subject to a Lien Held by Bank of America, N.A. (the "Motion") (C.P. No. 77). The
Motion seeks entry of an order authorizing the BOA Debtors2 to abandon the BOA Abandoned
Collateral. The Court has jurisdiction over the matters raised in the Motion pursuant to 28
V.S.C. ~~ 157 and 1334. This is a core proceeding pursuant to 28 V.S.C. ~ 157(b)(2)(A). The
relief requested in the Motion is in the best interests of the BOA Debtors, their estates, and their
creditors. Proper and adequate notice of the Motion and the hearing thereon has been given and,
to the extent necessary, the Court shortens any applicable notice period under Bankruptcy Rule
6007(a) and Local Rule 6007-1(B)(I), such that no other or further notice is necessary. Upon
review of the record before the Court, good and sufficient cause exists to grant the relief
requested. Accordingly, for the reasons announced on the record it is
ORDERED that:
1. The Motion is GRANTED.
2. The BOA Debtors are authorized to abandon the BOA Abandoned Collateral
pursuantto 11 U.S.C. 9554(a).
3. The automatic stay is terminated in respect of the BOA Abandoned Collateral.
BOA and any other party asserting a lien against or an interest in the BOA Abandoned Collateral
may enforce or assert such lien or interest under applicable non-bankruptcy law. The
abandonment of the BOA Abandoned Collateral shall be deemed a satisfaction of any secured
claim asserted against the BOA Abandoned Collateral, without prejudice to the right of BOA or
2 All capitalized terms shall have the meanings ascribed to them in the Motion unless otherwise defined herein.
870957-2
2
Case 07-19845-RBR Document 236 Filed 11/29/2007 Page 3 of 3
any other putative secured creditor to assert an unsecured deficiency claim against the estates and
the objections, offsets and defenses of the Debtors in respect thereto.
4. The Court shall retain jurisdiction over any matter or dispute arising from or
relating to the implementation of this Order.
# # #
Submitted by:
Paul Steven Singerman, Esq.
BERGER SINGERMAN, P.A.
200 S. Biscayne Blvd., Suite 1000
Miami, FL 3313 1
Tel. (305) 755-9500
Fax (305) 714-4340
singerman@bergersingerman.com
Copies to:
Paul Steven Singerman, Esq.
(Attorney Singerman shall serve a copy of this Order upon all interested parties upon receipt
andfile a certificate of service.)
870957-2
3
Est Cost
Item Perfonnance Bond Items: these Items are shown on the approved final development plans and have not
1# been comoletelv or correctlv Installed to date
1 Place finallifl of asohall on all streets. 530,0001
2 Comnlete construction of all unfinished allevs. 525,(](
3 Comolete construction of all unfinished sidewalks. $10,00
4 All disturbed areas not D1anned for buildinQ construction in the near Mure need to be seeded or sodded. S5,(](
5 Install decorative street sions oer the aooraved nlans. $2~t
6 Correct the handicaDDed oarallel oarkino soaces in front of the 0001 to meet ADA ouidellnes. $5,
The fire line valve covers have not been marked as required by the City and instead have standard water meter 5400<
7 boxes. The City recuires red valve box covers marked "Fire."
Reconstruct the curb return at the southwest comer of McLeod's Way and Old Fann Lane to comply with the 52,501
8 aoomved nlans.
Repair damaged streelllght poles and fixtures. Many streeUight poles are bent. leaning, damaged, or not set to
grade. Many street lights are still not working, but have been flagged for repair. Streetlight service has been N1~ Progress Energy
9 intennillenL should cover this
Clean concrete spillage from streetiight pole at the southeast comer of McLeod's Way and SR 434 and streighten $1,00/1
10 base. Straiahten oedestrian sianal DOle in this same location.
The end of the screen wall along the western boundary extends too far towards S.R. 434 and needs to be pulled
11 back bv about 1 a-feet to comoiV' with the ann roved nlans. $2ti
12 Comolete sionaoe and strioino at Roberts Famil Lane ner the aooroved oIans. 55,
13 Install oavers in narallel oarkina soaces maiiVrlfaces and deSinnate SmorAS with striDino. 512,
Site landscaping is incomplete, mulching is minimal or non existent, and the areas that have been installed are
being poorty maintained. Vegetation is dying in many places (including trees, grass. and shrubs) and needs to be $50,0(](
14 reolaced.
15 Install valve boxes around irriaation valves thatDratrude haohazardlv into sodded areas. $500
The construction/sales trailer has been abandoned and thus Innisbrook Lane should be constructed to Roberts
16 Family Lane ner the aoomved olans. covered in item 112
17 COmnlete Gazebo construction includina addition of benches andnlacement of trash receotacles. $10,00
Complete Pool construction including any remaining issues required for a Certificate of Occupancy, including but
not limited to completion of cabana building, outside shower installation. jacuzzi controls, tile around the fountain, $20,0(](
18 reoair of eroded olantino beds, mulchino around landscaninn, and olacement of lounaino furniture.
Subtotal 5202 500
Maintenance Bond Items: these are Items that have been Installed and accepted by the City, but are In need
of orooer maintenance and/or reoalr to comnlv with CItv standards.
Repair damaged and cracked concrete work throughout the community (curbs, gullers, sidewalks, ramps, etc.). 525,00
19 The maintenance bond covers the Citv-owned aortion of this work.
20 Reolace missino or damaoed sanitarv sewer cleanout cans. $1,M
21 Remove sediment and erosion control where no lonaer needed; reoair or install where it is needed. $1~
22 Reaair stonnwater inlet on Crimson Lane structure is offset $2,
23 The entire sanitarY sewer system needs to be cleaned out. 52,
24 Reaair washouts undenninina the sidewalk near the intersection of Sarasnarilla and Mcleod's Wav. $1,0
. Don" by City
25 Reoair washouts .undenninina the sidewalk near the Kaye Laoa and Old Fann Lane adiacent to the 0001 fencina. $5,OO~ already
At the east end Solaris Wharf Street. the area needs to be re-graded, stabilized, and cleaned up from the end of $3,oor
26 the navers to the auardrail.
27 Reoair the dearession in Blue Bavou Lane. $Ui{
28 Install detectable waminas where missina at sidewalk ramns and secure anv that are loose. $~
29 RAnair all broken ulilitv boxes and valve box covers (many olaces . 51,OOi
Subtotal $46 00
Code Enforcement Items:
Cleanup the entire community of trash, construction debris, materials stared onsite, etc. With no additional building
construction work planned in the near future, the site needs to be cleaned and restored to have a finished,
penmanent appearance. All construction dumpsters, porta potties, portable storage containers, construction/sales 510,()(](
30 trailer, temaorarv mailboxes construction sians, and all other constructian materials shall be removed.
At the buildings where construction has been suspended, the areas around the buildings need to be cleaned and $5.000
31 secured. includino the removal of exoosed utilitv lines.
HO. Items: the HOA Is resoonslble for the maintenance of the followlno Items
32 The stonnwater DOnd is overorown and needs treatment for aloae and weed orowth. $2~
33 The entire stonnwater svstem has sediment buill un and needs to be cleaned out. $2,
34 Reoair the oond fountain. 5
Subtotal 520 000
Total 5268.6IK