Court Finds Enforceable Settlement Agreement Between Subcontractor and Homeowner Despite Lack of Signature
Adonel Concrete Corp v. Furshman arises from a dispute between a concrete subcontractor and a homeowner. As part of renovations to the homeowner’s property, a general contractor hired the concrete subcontractor to perform a portion of the work. The homeowner was not satisfied with the subcontractors work and refused to pay for it. In response, the subcontractor recorded a $16,937.26 construction lien against the property.
Over the subsequent two weeks, the subcontractor and homeowner negotiated by phone and email. In a final email, the subcontractor confirmed in an email a prior phone call where the homeowners had agreed to pay $16,937.26, plus $4,500.00 in attorneys’ fees to the subcontractor. The email went on to state that the subcontractor would “prepare and record” a lien release and “prepare a mutual general release.” The email concluded by stating “[i]f this email does not correctly outline our conversation, please immediately contact me by email explaining your understanding of those portions of our conversation discussed in this email.”
The homeowners did not object to the email, but instead sent a check for $16,937.26, that said “For Final Driveway Payment” in the memo line. The day after sending the check, the homeowner sent an email stating:
Please send me the proposed lien release, general release, and any other paperwork for my review. After I have time to review, I will let you know if they are agreeable, and if I have any edits, comments, or concerns.
The subcontractor deposited the check and then emailed the homeowner a draft proposed settlement agreement and release, and requested that any proposed changes be provided. The homeowner indicated he would review and have any changes to the subcontractor the next day. The subcontractor signed the release, but the homeowner never did. Instead the homeowner claimed the lien was paid in full and they were no longer obligated to pay any attorneys’ fees. The subcontractor filed suit and the homeowners counterclaimed. The trial court subsequently granted summary judgment in favor of the homeowner and denied the subcontractor’s motion to enforce the settlement agreement. The subcontractor appealed.
On Appeal, Florida’s Third District Court of Appeal reversed the trial court’s decision, finding that a “valid and enforceable settlement” existed between the parties because “there was an objective manifestation by both parties of assent to the same terms.” Specifically, the Court found that the homeowners had demonstrated their assent to the settlement agreement by: (1) not objecting to the settlement confirmation email, (2) sending the check in the negotiated amount, and (3) replying “ok, thanks, will have to you tomorrow” to the email with the proposed release. The Court also found that the homeowner’s testimony regarding his subjective intent when doing that was not sufficient to over come the objective “external” signs of agreement. The Court also rejected the homeowner’s argument that he did not sign the mutual general release and that lack of signature showed a lack of agreement.
Accordingly, the Court reversed the trial court’s refusal to enforce the settlement agreement, and also allowed the subcontractor’s lien foreclosure action to remain in place.
About the Author:
Jason Lambert is a Florida Board Certified Construction Attorney and Partner in the Construction Industry Practice Group at Hill Ward Henderson, in Tampa, Florida. He is also the founder and chief contributor to the Hammer & Gavel construction law blog. Jason focuses his practice on representing contractors, subcontractors, and materials suppliers throughout the state of Florida. Before law school, Jason spent a decade working in the construction industry, primarily as a project manager and operations director for both new construction and remodeling. He can be reached at jason.lambert@hwhlaw.com or 813-227-8495.
