Court Reverses Construction Lien Foreclosure over Procedural Concerns and Factual Issues Regarding Substantial Completion
Torres v. A&P Air Conditioning Corp arises from a dispute over the installation of an HVAC system for a homeowner and a payment dispute with the HVAC contractor. In May 2021, the property owner and HVAC contractor entered into a contract for two air conditioning units to be installed at their apartment. After installation, the property owner was dissatisfied with the installation and refused to pay the balance due on the contract.
The HVAC contractor recorded a construction lien against the property and a short time later filed suit to foreclose the lien. The owners filed their own lawsuit for slander of title, and the two cases were consolidated. Two years later, the HVAC contractor filed a suggestion of mootness, claiming that all matters in the owners’ complaint with the HVAC contractor were settled, based on the owners’ payment of the full balance owed several months after the lawsuits were filed.
Subsequently, the owners filed a motion for summary judgment on their slander of title claim, arguing that the lien was premature and that they had only paid the balance due because the HVAC contractor had come out and addressed the claimed problems with the installation. Accordingly, the owners’ argued
[b]ecause [the HVAC contractor] failed to properly install the two-ton unit and to pull a new permit when it later replaced the incorrectly-installed unit, [it] did not substantially perform under the Agreement and [could not]recover on its claim of lien—accordingly, there [was] no genuine issue of material fact that the lien [was] a cloud on the premises.
The owners later filed a substantially similar motion for summary judgment as to the HVAC contractor’s lien foreclosure claim. In July 2024, the trial court held a hearing where the only motion noticed for hearing was the owners’ motion for summary judgment as to the HVAC contractor’s lien foreclosure claim. The trial court denied the motion, finding that the entire case was moot. The court later entered final judgment in favor of the HVAC contractor, finding that the HVAC contractor’s work was substantially complete at the time it filed its claim of lien. The court specifically stated at the hearing that whether the work was right or not, it passed inspection, and that’s what constituted substantial completion and that’s when the owners’ should have paid. The trial court then entered an order denying both of the owners’ motions for summary judgment and entering judgment in favor of the HVAC contractor’s suggestion of mootness. The owners appealed.
On appeal, Florida’s Third District Court of Appeal reversed the trial court finding that (1) the trial court erred in granting the HVAC contractor affirmative relief without notice and in the absence of a pleading seeking such relief and (2) that genuine issues of material fact remained as to whether the work was substantially performed, notwithstanding the owners’ payment in full to the contractor.
As to the first issue, the Third DCA noted that the only matter set for hearing was the owners’ motion for summary judgment, and that the court’s ruling essentially “short-circuited” the entire case by determining without a motion from the HVAC contractor or notice to the property owner that the HVAC contract was entitled to judgment in its favor on its lien claim.
As to the second issues, the Third DCA noted that substantial performance is typically a question for the trier of fact to resolve based on relevant evidence, and that the case, at the time of the trial court’s ruling, was not in a posture to allow the trial court to determine as a matter of law that the HVAC contractor had substantially performed and was entitled to foreclose its lien.
The appellate court then remanded the case to the trial court for further proceedings consistent with its opinion.
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.
