2016-02 Bond Newsletter

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 THE COLOR OF OUR NEWSLETTER REFLECTS MY MOOD… as it relates to the upcoming election.  For those of you who have read our previous newsletters, you know that I am politically just slightly left of Attila the Hun.  I feel politically claustrophobic because no matter which way I turn feel trapped in a political nightmare.  I haven’t felt this bad since Barry Goldwater lost to Lyndon Johnson.

 I know exactly what Hillary Clinton is and what she represents and I find her the most unacceptable candidate that has been on the ballot in my lifetime.  I have absolutely no idea what Donald Trump represents and even though he is running as a Republican and does share some of my Republican populous views, he wanders too far off of the path on certain issues.  I am willing to throw the dice and go for Donald Trump.  As unacceptable as he may seem in some ways, I seriously doubt he is capable of screwing up the next four years in a way that only Hillary Clinton can and probably will.

 If you had asked me six months ago, three months ago or even a month ago, I would have said that Trump didn’t stand a chance, but once again it appears that my prognostications as it relates to this election may continue to be wrong as they have over the last nine months.  Therefore, I am taking the cowards way out and truthfully indicating that I have no idea.  Frankly, it is too close for anyone to call at this point in time.


BASED UPON THE FAILED PRESIDENCY OF THE LAST EIGHT YEARS AND THE POTENTIAL DISASTER THAT WE ARE FACING FOR THE NEXT FOUR YEARS… most of the population will be seeking liquid relief in one form or another.  In this country, beer is the relief most often self-administered in times of stress.

Based upon that, as a service to the bond newsletter, I thought that the least I could do would be to educate our readers on this essential liquid.

BEER IS THE THIRD MOST POPULAR BEVERAGE IN THE WORLD…coming in behind tea and water.  Monks brewing beer in the Middle Ages were all allowed to drink five pints of beer a day.  Bavaria still defines beer as a staple food.  The oldest known written recipe known to man is for beer.

In English pubs, ale is ordered by pints and quarts.  Therefore, in old England, when customers got unruly, the bartender used to yell out at them to mind their own pints and quarts and settle down.  That is where we got “mind your P’s and Q’s.”

It is a well documented fact that one of the reasons the Pilgrims landed at Plymouth Rock in 1620, rather than sail further south to a warmer climate, was because their supplies were dwindling, “especially our beer.”

ALL BEER CAN BE DIVIDED INTO TWO CATEGORIES: ALES AND LAGERS.  There are then numerous subcategories of different “styles” that fall under both categories:

  • ALE – Ales are top fermented beers that are brewed at warmer temperatures. They tend to be fairly complex and flavorful with fruit and/or floral tones.  Most ales are full-bodied and rich in taste.
  • LAGER – Lagers are bottom-fermented and brewed at lower temperatures. They are typically easy drinking, light in body and mild in taste, with a clean flavorful and crisp finish.


 AMBER LAGER – full flavored with more hops, malt and overall character than pale lagers.

  • AMERICAN PALE ALE – gold to amber in color with flavor and aroma centered around the citrus and pine character of American hops.
  • BELGIAN BLONDE ALE – light-colored Belgian ale with a spicy hop nose and perfumy or honey-like aroma. Light complex finish.
  • BELGIAN STRONG ALE – can vary from pale to dark brown in color and is medium to full-bodied, with a high alcohol character. Includes Tripels, Dubbels and Abbey ales.
  • BELGIAN WHITE – also known as “Witbier” or “Weissbier,” white beers are made from wheat.
  • BOCK – a strong, malty lager typically of German origin with a low hop presence and rich, toasty malt characteristics.
  • BROWN ALE – ranges from deep amber to brown in color, with caramel and chocolate notes. They tend to be strong and malty with an even level of “nuttiness.”
  • ENGLIGH ALE – a golden to reddish-amber ale with enhanced hop bitterness, balanced with malty aromas.
  • HEFEWEIZEN – a German style of wheat beer. “Hefe” means “with yeast,” which adds unique flavors of banana, apple or cloves with a dry, tart edge and some spiciness.
  • INDIA PALE ALE – commonly abbreviated as “IPA,” this version of a pale ale employs a significant amount of hops originally to help it make the voyage overseas. The added hops give a strong floral note with high bitterness, complementing a higher alcohol content.
  • PALE LAGER – pale to golden colored lagers that are dry, clean-tasting and crisp with subtle flavors.
  • PILSNER – a type of pale lager with a more prominent hop character that takes its name from the city of Plzen in the Czech Republic. Nine out of ten beers consumed today are based on the original pilsner from 1848.
  • STOUT – Stouts are dark beers made using roasted malt or barley. The dark roast gives the beer its unique toasty or coffee-lake taste.
  • TRIPEL – Originating from Trappist Monks in Belgium, the Tripel is complex and wonderful creation. Using “triple” the malts with an even balance of hops, these beers are deceptively strong.  Bright and gold in color with a spicy, floral and slightly sweet finish.

 “Without question, the greatest invention in the history of mankind is beer.  Oh, I grant you that the wheel was also a fine invention, but the wheel does not go nearly as well with pizza.” – Dave Barry

 “I feel sorry for people who don’t drink.  When they wake up in the morning, that’s as good as they’re going to feel all day.” – Frank Sinatra


 ONE OF THE MOST IMPORTANT LEGAL ISSUES… that we deal with on a continual basis is the issue relating to the Statute of Limitation in our state.  Four years ago in a 2012 bond newsletter I outlined some of the issues with the Statute of Limitations.  Because these issues continue to plague us, many times because of lack of understanding, I am going to take the liberty of repeating that article to hopefully give some clarity to the issues with the Statute of Limitations:


  • The relevant Statute of Limitation is found in Section 95.11(2)(b), Florida Statutes which provides for a five (5) year Statute of Limitation for actions on any contract or written instrument (obviously a bond is a written instrument) (Note: The prevailing case is Federal Insurance v. Southwest Florida Retirement). It is important to understand that 95.11(2)(b) refers to Performance Bonds, not statutory Payment Bonds.  Therefore, the Statute of Limitation on any Performance Bond in the State of Florida will have a five (5) year limit on the ability of any potential claimant to file a claim against the contractor or the surety.


  • There are two (2) Florida Statutes that defines the Statute of Limitations in the State of Florida for Payment Bonds. The statutes are 713.23 and 255.05.  These statutes limit the liability of the surety to lawsuits filed within one year of the completion of the work by the claimant.  These are obviously Statutory Bonds, not Common Law Bonds.  Therefore, a subcontractor, for example, working on a project where the General Contractor provided a Statutory 713.23 or 255.05 bond to the project owner is subject to the one year Statute of Limitation for filing suit under the bond with certain limited exceptions under 255.05.  In the event that a subcontractor has furnished a payment bond to the General Contractor, claimants under the subcontractor’s payment bond have five (5) years to advance a lawsuit.  UNLESS the General Contractor has also furnished a payment bond on that same project, in which event the statute of limitations is likewise limited to one (1) year.  Under Section 713.23(1)(a), the statute states that “any form of bond given by a contractor conditioned to pay for labor, services and material used to improve real property shall be deemed to include the condition of this subsection.”  Therefore, whether a bond in the State of Florida given to a contractor conditioned to pay for labor, services and material refers to 713.23 or not, it is still deemed to be a Statutory Payment Bond.


  • Various municipal owners have been inserting Florida Statute 95.11(3)(c) in their bond forms. 11(3)(c) is both a Statute of Limitation and a Statute of Repose.  It limits the right of the owner to sue the contractor (and some may argue, the surety as well) to ten (10) years.  The typical reason for including this statute would be to give extended coverage for latent defects.  Under 95.11(3)(c), the owner has four (4) years from the time of discovery of a latent defect to sue the contractor and/or surety company under this statute, but they are limited to ten (10) years to make any claim.  As an example, if three (3) years after the project was completed, the owner discovers a latent defect and notifies the contractor, the owner still has four (4) years in which to sue for latent defects.  Under that scenario, the total time that is allotted under 95.11(3)(c) would be seven (7) years.  On the other hand, if the latent defect is found within the ninth year after the building is complete, there is only one year to sue based upon the ten (10) year limit of liability under 95.11(3)(c).  As in the case of 95.11(2)(b), this statute refers to the Performance, not the Payment Bond.  Latent defect issues are performance issues, not payment issues.  If  it is a Statutory 713.23 Payment Bond, the right to sue is limited to one (1) year as it is in the case of a 255.05 Statutory Payment Bond (public projects).  From a common sense standpoint, a latent defect issue would not be a payment issue, but a performance issue, so adding that statute to the Payment Bond would make no sense.


         We are all aware of the fact that the surety industry has not been willing to deal with the ten (10) year limit to bring suit against them under 95.11(3)(c).  There are a number of ways to address the issue.  The most obvious is to delete that from any Performance Bond that we issue.  The second approach has been to maintain the statute in the Performance Bond, but to limit the surety’s liability to five (5) years (Miami-Dade County).  This, however, still leaves the contractor liable for ten (10) years, five (5) of those will not be accompanied by their “surviving partner” (surety).


It is a shame to be enjoying a great retirement ten (10) years later and have a subpoena served to you on the golf course for a potential latent defect on a project you completed ten (10) years before.  It is a risk that each contractor has to assess on their own.



 THERE ARE A NUMBER OF WAYS YOU CAN DEFINE THE SOCIAL AND ECONOMIC CONDITION …of our society.  I think the following statistics are a real eye opener to what we have become:


  • California – New Mexico – Mississippi – Alabama – Illinois – Kentucky – Ohio – New York – Maine – South Carolina.


These 10 States now have More People on Welfare than they do Employed!!!


  • In July, the Senate Budget Committee reports that fiscal year 2012, between food stamps, housing support, child care, Medicaid and other benefits, the average U.S. Household below the poverty line received $168.00 a day in government support. What’s the problem with that much support?  Well, the median household income in America is just over $50,000, which averages out to $137.13 a day.  To put it another way, being on welfare now pays the equivalent of $30 an hour for 40 hour week, while the average job pays $24.00 an hour.


  • A recent “Investor’s Business Daily” article provided statistics from a survey by the United Nations International Health Organization:


  • Percentage (%) of men and women who survived a cancer five years after diagnosis:

U.S.                  65%

England            46%

Canada             42%

  • % of patients diagnosed with diabetes – received treatment within 6 months:

U.S.                  93%

England            15%

Canada             43%

  • % of seniors needing hip replacement who received it within 6 months:

U.S.                  90%

England            15%

Canada             43%

  • % referred to a medical specialist who see one within one month:

U.S.                  77%

England            40%

Canada             43%

  • Number of MRI scanners (a prime diagnostic tool) per million people:

U.S.                  71

England            14

Canada             18

  • % of seniors (65+), with low income, who are in “excellent health”:

U.S.                  12%

England            2%

Canada             6%

  • And now…for the last statistic: National Health Insurance?

U.S.                  NO

England            YES

Canada             YES


  • Check the last set of statistics!! The percentage of each past president’s cabinet…who had worked in the private business sector…prior to their appointment to the cabinet.  You know what the private business sector is: a real-life business…not a government job.  Here are the percentages:


38%      T. Roosevelt

40%      Taft

52%      Wilson

49%      Harding

48%      Coolidge

42%      Hoover

50%      F. D. Roosevelt

50%      Truman

57%      Eisenhower

30%      Kennedy

47%      Johnson

53%      Nixon

42%      Ford

32%      Carter

56%      Reagan

51%      G. H. Bush

39%      Clinton

55%      G. W. Bush

  8%       Obama


         This helps explain the bias, if not the incompetence, of this current administration:  ONLY 8% of them…have ever worked in private business!  And these people are trying to tell our corporations how to run their business?  How can the president of a major nation and society, the one with the most successful economic system in world history, stand and talk about business when he’s never worked for one?  Or about jobs when he has never really had one?  And, when it’s the same for 92% of his senior staff and closest advisers?


         They’ve spent most of their time in academia government, and/or non-profit jobs or as “community organizers.”



IT IS AMAZING AS YOU LOOK ACROSS THE COUNTRY… how well many of the states and cities have done economically and socially under the Republican administration.  It is also interesting to note how many states and cities are in both economic and social turmoil under liberal Democratic rule.  No comparison makes that more obvious than what I will call A TALE OF TWO CITIES:






2.7 million

2.15 million


Median HH Income




% African-American




% Hispanic




% Asian




% Non-Hispanic White




Pretty similar until you compare the following:





Concealed Carry – Legal




# of Gun Stores


184 Dedicated gun stores plus 1500 – legal places to buy guns – Wal-Mart, K-mart, sporting goods, etc.




Homicides, 2012






Homicides per 100K






Average January high temperature (F)




Conclusion – Cold weather causes murders.  This is due to global warming.




AS A CELEBRATION TO THE BEGINNING OF FOOTBALL SEASON… I am including some football quotes/humor:


  • “I make my practices real hard because if a player is a quitter, I want him to quit in practice, not in a game.” – Bear Bryant / Alabama
  • “It isn’t necessary to see a good tackle, you can hear it!” – Knute Rockne / Notre Dame
  • “The man who complains about the way the ball bounces is likely to be the one who dropped it.” – Lou Holtz / Arkansas –Notre Dame
  • “When you win, nothing hurts.” – Joe Namath / Alabama
  • “A school without football is in danger of deteriorating into a medieval study hall.” – Frank Leahy / Notre Dame
  • “There’s nothing that cleanses your soul like getting the hell kicked out of you.” – Woody Hayes / Ohio State
  • “In Alabama, an atheist is someone who doesn’t believe in Bear Bryant.” – Wally Butts / Georgia
  • “I never graduated from Iowa. But I was only there for two terms – Truman’s and Eisenhower’s.” – Alex Karras / Iowa
  • “Football is NOT a contact sport, it is a collision sport. Dancing IS a contact sport.” – Duffy Daugherty / Michigan State
  • After USC lost 51-0 to Notre Dame, his post-game message to his team was, “All those who need showers, take them.” – John McKay / USC
  • “The only qualifications for a lineman are to be big and dumb. To be a back, you only have to be dumb.” – Knute Rockne / Notre Dame
  • “I’ve found that prayers work best when you have big players.” – Knute Rockne / Notre Dame
  • Ohio State’s Urban Meyer on one of his players: “He doesn’t know the meaning of the word fear. In fact, I just saw his grades and he doesn’t know the meaning of a lot of words.”
  • Why do Tennessee fans wear orange? So they can dress that way for the game on Saturday, go hunting on Sunday and pick up trash on Monday.
  • What does the average Alabama player get on his SATs?
  • How many Michigan State freshmen football players does it take to change a light bulb?   That’s a sophomore course.
  • What do you say to a Florida State University football player dressed in a three-piece suit? “Will the defendant please rise.”
  • How can you tell if a Clemson football player has a girlfriend? There’s tobacco juice on both sides of the pickup truck.
  • Why did the Tennessee linebacker steal a police car? He saw “911” on the side and thought it was a Porsche.
  • How do you get a former Illinois football player off your porch? Pay him for the pizza.




IN OUR WORLD… capacity and service are the two ingredients that have made us the number one surety brokerage firm in the southeast United States.  If we currently do not have the privilege of servicing your surety bond credit needs, let’s talk.





“Opportunity is missed by most people because it is dressed in overalls and looks like work” – Thomas Edison



Charles J. Nielson