Court Reinstates Contractor’s Construction Lien Following Improper Discharge by Trial Court
Custom Homes by Triumph LLC v. Sverdlow, arises from a dispute between a homeowner and contractor regarding the construction of a new home for the homeowner. The contractor filed a lawsuit against the homeowner seeking for foreclose a construction lien recorded against the homeowner’s property and for breach of contract. In response, the homeowner filed a counterclaim seeking discharge of the contractor’s lien under 713.21, Florida Statutes.
After the contractor failed to answer the counterclaim, the homeowner filed a motion to discharge the lien, arguing that because the 20-day deadline to answer and show cause why its lien should not yet be enforced had passed, the lien should be discharged. The contractor then responded to the counterclaim, and responded to the motion to discharge by arguing that (1) it had already taken action to enforce its lien in its original complaint and (2) that the 20-day period started only upon the issuance of a summons, and that no summons had been issued by the clerk. Despite this, the trial court discharged the lien and dismissed the complaint with prejudice. The contractor appealed the court’s ruling to Florida’s Second District Court of Appeal.
On appeal, the Second DCA initially noted that while it did not have jurisdiction to address the trial court’s ruling as an interlocutory appeal, it did have jurisdiction to treat the appeal as a petition for writ of certiorari. The court noted that this type of jurisdiction narrowly applies to circumstances where “(1) the order [appealed from] departs from the essential requirements of the law, and (2) results in material injury for the remainder of the case (3) that cannot be corrected on postjudgment appeal.” The court determined these circumstances existed here because, the discharge of the contractor’s lien put the homeowner in the position to “sell or transfer the property and deprive the [contractor] of their statutory basis for the claim, which cannot be remedied on post judgment appeal.”
Turning to the merits of the contractor’s arguments the Second DCA agreed with the contractor and found that the trial court had committed two errors in discharging the lien. First, the trial court improperly calculated the contractor’s 20-day show-cause deadline based on service of the counterclaim. Under 713.21(4), Florida Statutes, the issuance of the show-cause summons by the clerk is what triggers the deadline. The concluded by stating:
Because the clerk never issued a show-cause summons, [the contractor’s] twenty-day deadline never even commenced. So, in derogation of the plain language of the statute, the trial court prematurely discharged [the contractor’s] construction lien.
The trial court’s second error was in overlooking that fact that by the time the homeowner filed its counterclaim to discharge the lien, the contractor had already met one of the requirements to avoid discharge of the lien — namely taking action to foreclose the lien. The court stated:
[The contractor's] complaint included a cause of action to foreclose its lien. And by seeking to foreclose its lien, [the contractor] was necessarily seeking to enforce it. So even if the clerk had issued a show-cause summons, [the contractor] had already completed one of the two alternative actions—“show cause ... why [the] lien should not be enforced [by action]” or “commence such action”—that the summons would have directed it to accomplish, that is, commence an action to enforce its lien.
Accordingly, the trial court’s order discharging the lien and dismissing the lien foreclosure count was quashed and the lien and lien foreclosure count restored.
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.
