By Allison Pauley, Summer Associate

Many significant construction projects are planned, funded and implemented pursuant to joint venture agreements (JVA’s). Before undertaking a JVA, the parties must carefully evaluate contractual obligations and fiduciary duties to the joint venture before the project begins to avoid the pitfalls that befell the litigants in the case of The Lane Construction Co. v. Skanska USA, where the parties had to turn to the court to resolve their complex dispute. Lane Constr. Corp. v. Skanska USA Civ. Se., Inc., 174 F.4th 1 (11th Cir. 2026).

Lane Construction centers on the construction of the “I-4 Ultimate Project” in Florida.  The Florida Department of Transportation (FDOT) solicited bids in 2013 for the project.  In response, Skanska USA Civil Southeast, Inc. (Skanska), Granite Construction Company (Granite), and The Lane Construction Company (Lane) formed an unincorporated joint venture, “SGL,” with Skanska being the Managing Party. This project was structured as a public-private partnership (P3 Model), in which a private concessionaire, I-4 Mobility Partners OpCo LLC (I4MP), partnered with the three contractors to secure the project with FDOT with a $2.3 billion bid. After being selected to construct the I-4 Ultimate Project, SGL entered into a Design Build Agreement (DBA) with I4MP.

Unfortunately, SGL faced a multitude of challenges from the very beginning of their construction efforts in 2015, leading to the joint venture quickly falling into the red. After the discovery of a large sinkhole in a critical area further stalled construction, SGL tried to find a way out of the project. This became known as the “Termination Request.” SGL engaged two outside law firms to analyze whether SGL could terminate the project, with both coming to the same conclusion: SGL had no termination rights according to the DBA, that FDOT was in ultimate control, and that requesting termination of the project could have serious consequences. At an SGL meeting in 2018, outside counsel for Lane presented in favor of the Termination Request, but Skanska and Granite were not persuaded. Skanska and Granite were in favor of exploring other solutions, such as negotiating with FDOT.

A deal with FDOT was successfully negotiated and construction of the I-4 Ultimate Project continued throughout 2020. Tensions continued to rise amongst the joint venturers, however, and the situation boiled over when Lane filed suit against Skanska for breach of fiduciary duty and gross negligence in 2021. Lane’s lawsuit followed its refusal to make any further capital contributions starting with the January 2021 Cash Call. Skanska countersued Lane for breach of contract and indemnity, with Granite intervening and pursuing the same.

The District Court granted summary judgment in favor of both Skanska and Granite on their counterclaims, ruling that “‘Lane’s refusal to pay the capital calls materially breached the [JVA].’” Lane Constr. Corp.,174 F.4th at 12. Lane’s breach of fiduciary duty and gross negligence claims would then proceed to trial. Following a 10-day trial in the fall of 2023, the District Court held that Skanska neither breached its fiduciary duties nor acted with gross negligence in choosing to negotiate with FDOT instead of sending the Termination Request. Id. Regarding Lane’s breach of contract, the District Court ordered Lane to pay $49 million and $30 million to Skanska and Granite, respectively, and also imposed prejudgment interest and allowed attorneys’ fees to be sought. Id. Lane appealed to the Court of Appeals for the 11^th Circuit, which affirmed the findings of the District Court. Id.

On appeal, the Eleventh Circuit Court of Appeals analyzed both Lane’s material breach and Skanska’s duty of loyalty. Id.

Lane stopped performing by refusing to continue making capital contributions, claiming that Skanska’s breach of fiduciary duty and gross negligence constituted a material breach that relieved Lane of its obligation to perform. However, when the Court found that Skanska neither breached its fiduciary duty nor acted with gross negligence, the Court determined that Lane committed the material breach. Id. at 13. Because Skanska’s actions and inactions did not constitute a material breach, Lane was not entitled to cease performance. See id. at 11. Therefore, when Lane stopped contributing capital and undeniably stated it would no longer pay capital contributions to SGL, Lane materially breached the Joint Venture Agreement. Id. at 15.

According to Florida’s Revised Uniform Partnership Act (FRUPA), Skanska owed the joint venture itself, as well as each member of the joint venture, a duty of care and a duty of loyalty. Only the duty of loyalty was at issue in this case. FRUPA allows partners to “recalibrate” the duty of loyalty, meaning that a partnership agreement may alter the duty by identifying activities that would not violate the duty of loyalty, so long as they are not “manifestly unreasonable.” While the JVA did not recalibrate the duty of loyalty according to FRUPA, SGL would have been wise to have done so. The ultimate parent company of Skanska is also the ultimate parent company of I4MP, a fact that was known by all parties to the joint venture. And while this appears typical in P3 Models, Skanska should have instituted available safeguards in the Joint Venture Agreement to protect the venture from any potential conflicts of interest between Skanska and I4MP. Failure to do so resulted in Skanska being exposed to liability for a breach of fiduciary duty as the Managing Party of the joint venture. The ability to alter the duty of loyalty that is owed to joint venturers could have been used by Skanska to avoid a significant portion of this litigation.

This case is a cautionary tale on how important it is to use the tools that are available to you when drafting a construction contract, especially when foreseeable conflicts and issues can be accounted for during the drafting process. Skanska could have accounted for the potential conflict between itself and I4MP by reformulating the duty of loyalty it owed to the parties of SGL. The construction contract here placed significant financial risk on the joint venture and reserved ultimate termination control for the FDOT, leaving SGL at an impasse when the project went south. This could have been accounted for in the JVA by adding a provision that identified a trusted, agreed-upon outside counsel, mediator, or arbitrator to resolve the conflict. The same goes for deciding what happens if a party were to materially breach the contract, and what happens when the parties to the JVA lack contractual solutions to resolve intra-party clashes. While it will potentially cost more in legal fees up front, those are dollars well spent if the parties account for and mitigate potential issues that could arise during the contract’s performance while they are drafting the contract instead of having to litigate them on the back end.