IN THE SUPREME COURT OF FLORIDA ROBERT MICHNAL, S.CT. CASE NO.: SC03-1021 4 TH DCA CASE NO.: 4D01-3118 Petitioner, - vs- PALM COAST DEVELOPMENT, INC., Respondent. / BRIEF OF RESPONDENT ON JURISDICTION On Appeal from the Fourth District Court of Appeal of the State of Florida WRIGHT, PONSOLDT & LOZEAU 1000 S.E. Monterey Commons Blvd. Suite 208 Stuart, FL 34996 and CARUSO & BURLINGTON, P.A. Suite 3A/Barristers Bldg. 1615 Forum Place West Palm Beach, FL 33401 (561) 686-8010 Attorneys for Respondent
TABLE OF CONTENTS PAGE TABLE OF AUTHORITIES PREFACE ii iii STATEMENT OF THE CASE AND FACTS 1 SUMMARY OF ARGUMENT 3 ARGUMENT 4 QUESTION PRESENTED THE FOURTH DISTRICT S OPINION DOES NOT EXPRESSLY AND DIRECTLY CONFLICT WITH ANY OTHER FLORIDA APPELLATE DECISIONS CONCLUSION 10 CERTIFICATE OF SERVICE 11 CERTIFICATE OF TYPE SIZE & STYLE 12 i
TABLE OF AUTHORITIES PAGE Aronson v. Keating, 386 So.2d 822, 823 (Fla. 4 th DCA 1980) 4, 8 Home Electric of Dade County, Inc. v. Gonas, 547 So.2d 109, 110 (Fla. 1989) 10 Robert M. Swedroe Architects/Planners, A.I.A., P.A. v. First American Inv.Corp., 565 So.2d 349 (Fla. 1 ST DCA 1990) 4, 9 Stunkel v. Gazebo Landscaping Design, Inc., 660 So.2d 623 (Fla. 1995) 3, 5-7, 9, 10 Fla. Const. Article V, 3(b)(3) 10 713.01(13), Fla.Stat. 6 713.06(1), Fla.Stat. (1997) 5 713.06(2)(a), Fla.Stat. (1997) 3, 5, 7, 8 713.08(5), Fla.Stat. (1997) 2-5 713.08(5),Fla.Stat. (1997) 8 ii
PREFACE This is a Petition for Review which requests this Court to review the decision of the District Court of Appeal on the basis that it expressly and directly conflicts with a decision of the Supreme Court and/or another District Court of Appeal. The parties will be referred to by their proper names or as they appeared in the trial court. The following designation will be used: [A- ] - Respondent s Appendix 1 1 /Fourth District Court s decision in the case sub judice. iii
STATEMENT OF THE CASE AND FACTS Petitioner s Brief does not present all the relevant facts contained in the District Court s Opinion. Those facts are that in the Spring of 1996, Defendant Michnal sought bid from several builders for the construction of his dream home. Plaintiff, Palm Coast Development, Inc., came in as the low bid at $2.865M [A-1]. To lower the cost as Michnal requested, Palm Coast suggested changing the house s support structure from an Epicore-composite system to a wood floor truss system [A-1]. Michnal and Palm Coast ultimately entered into a written contract on December 4, 1996, whereby Palm Coast would build the house for $2.075M [A-1]. While not reflected in the blueprints, the contract included an addendum which provided the home would be built with a wood floor truss system, and not the Epicore-composite system (as provided in the blueprints)[a-1]. Construction commenced in early 1997, and by late spring, Palm Coast had completed the pilings, the laying of the slab and the structural work for the first floor [A-1]. When Palm Coast was ready to bid out the truss system, Michnal s original architect and engineer refused to design a wood floor truss system to replace the originally designed Epicore system. Michnal then refused to grant his original engineer and architect releases from liability, in exchange for their agreement to allow a secondary engineer to use and adapt their original plans [A-1, A-2]. In response, on June 27, 1997, the original architect withdrew permission to use his drawings to 1
redesign the structure [A-2]. Palm Coast now realized it would have to revert to using the originally designed Epicore system and rebid all work related thereto [A-2]. On July 10, 1997, Michnal met with Palm Coast Vice President Bob McNally to discuss a number of issues including the need to switch back to the Epicore support system for the second story [A-2]. Construction ground to a halt due to the outstanding truss issue [A-2]. On July 21, 1997, Palm Coast faxed Michnal a letter outlining the Epicore cost breakdown as a follow up to their July 10, 1997 meeting [A- 2]. Michnal, being unhappy with the extra cost for reverting back to the Epicore system, sent a July 22, 1997 letter to Palm Coast, terminating Palm Coast and directing it to cease all activity on the job [A-2]. On October 17, 1997, Palm Coast filed a construction lien against Michnal in the amount of $59,304.60 [A-2]. Referring specifically to 713.08(5), Fla.Stat. (1997)(lien must be filed within ninety (90) days of final furnishing of labor, services or materials), the Fourth District noted for Palm Coast s October 17, 1997 lien to be timely, its final furnishing had to have occurred on or after July 19, 1997 [A-3]. The test to be applied in determining whether particular work constitutes a final furnishing under 713.08(5) is whether the work was done in good faith, within a reasonable time, in pursuance of the terms of the contract, and whether it was necessary to a finished job [A-5]. In answering the salient question - - whether the challenged labor, services or materials were related directly to the property, or merely incidental to it - - the Fourth District 2
found Palm Coast s July 21, 1997 fax to Michnal constituted the furnishing of a service for purposes of the limitation. The July 21 st Palm Coast fax, an attempt by the contractor to resolve the outstanding truss issue, was prepared in good faith, per the contract and addendum, was done within a reasonable time, in pursuance of the terms of the contract, and was necessary to a finished job [A-5]. Thus the Fourth District Court of Appeal found the construction lien was timely filed under 713.08(5), and affirmed the lien foreclosure in Palm Coast s favor [A-5]. Michnal seeks to invoke this Court s discretionary jurisdiction. SUMMARY OF ARGUMENT The Fourth District s decision does not expressly and directly conflict with other Florida appellate decisions. Stunkel v. Gazebo Landscaping Design, Inc., 660 So.2d 623 (Fla. 1995) dealt with a different section of the Construction Lien Statute than that which is at issue here, and that section applies only to persons who are not in privity with the owner, unlike here. Stunkel held that the forty-five day period for notice under 713.06(2)(a) begins when the services or materials are furnished at the job site. By creating tangible activity at the job site as the trigger point, Stunkel provided protection to persons acting without a contract against arguments that their time for serving notice to the owner began to run anytime earlier than when they actually did something on the property. Stunkel has no application to this case, which involved a contractor in privity with the owner, who had already constructed 3
improvements on the land, and the issue here was not whether services or labor were performed on the site, but whether they were performed pursuant to the contract. There is also no conflict with Robert M. Swedroe Architects/Planners, A.I.A., P.A. v. First American Inv.Corp., 565 So.2d 349 (Fla. 1 ST DCA 1990). Indeed, the First District applied the same four pronged test of good faith, reasonable time, pursuant to the terms of the contract, and necessary for a finished job to determine whether the challenged services were related directly to the property, or merely incidental to it. ARGUMENT THE FOURTH DISTRICT S OPINION DOES NOT EXPRESSLY AND DIRECTLY CONFLICT WITH ANY OTHER FLORIDA APPELLATE DECISIONS. The Fourth District s Opinion determines that the July 21 st fax from Palm Coast to Michnal constitutes the furnishing of a service for purposes of the limitation period referenced in 713.08(5), Fla.Stat. (1997)(lien must be filed within ninety (90) days of final furnishing of labor, services or materials). The Fourth District stated the test to be applied in determining whether particular work constitutes a final furnishing under 713.08(5) is whether the work was done in good faith, within a reasonable time, in pursuance of the terms of the contract, and whether it was necessary to a finished job. See Aronson v. Keating, 386 So.2d 822, 823 (Fla. 4 th DCA 1980). In the instant case, the Fourth District held that the July 21 st fax was the 4
furnishing of a service within the limitation period and was prepared and transmitted in good faith. Second, per the original contract between Palm Coast and Michnal, and the addendum thereto, switching to the Epicore system from the wood truss system would constitute a change order and would have to be accepted in writing by Michnal before Palm Coast could proceed. Third, the provision of the service (faxing the July 21, 1997 letter outlining the Epicore cost breakdown as a follow up to the July 10, 1997 meeting) was done within a reasonable time; it was a service provided in pursuance of the terms of the contract which called for construction and completion of the two story structure and return to the Epicore system could not be completed without Michnal s written authorization. Lastly, resolution of the truss issue was an absolute prerequisite to Palm Coast s ability to proceed with the construction of the second floor, and was therefore necessary to a finished job. Conversely, Michnal relies on Stunkel v. Gazebo Landscaping Design, Inc., 660 So.2d 623 (Fla. 1995) for its central premise that the furnishing of labor, services or materials governing the time for recording a claim of lien under 713.08(5) includes only labor performed at the job site. Stunkel does not so hold. Stunkel construed 713.06(2)(a), Fla.Stat.(1997) and Michnal ignores 713.06(1), Fla.Stat. (1997), which clearly states that whole section applies only to persons not in privity with the owner.... 713.06(2)(a) provides that such persons must serve a notice on the owner of their name and the nature of the services or materials furnished no later than forty-five 5
(45) days after commencing the furnishing of labor, services or materials. Stunkel held that the forty-five (45) day period begins to run only when the lienor begins to furnish services or materials only in the sense of the commencement of an actual improvement on the land as the words commencement of improvement and improvement are defined in the statute. 713.01(4) and (13). The issue in Stunkel was whether the forty-five (45) day period began to run when the owners traveled with the subcontractor and selected trees to be planted on their property, or when the subcontractor actually began to plant the trees, and the this Court determined that only the latter constituted the commencement of an improvement. By creating tangible activity at the job site as the trigger point, the Stunkel opinion provided protection to persons acting without a contract against arguments that their time frame for serving notice to the landowner began to run any time earlier than when they actually did something to improve the property. Critically, the question certified in Stunkel involved a subcontractor who had no contract with the owner and the certified question was answered in the negative specifically because of the lack of a contract. Id. at 624-625. Stunkel has no application to the instant case, which involves a contractor in privity with the owner who has already constructed improvements on the land. The issue is not whether services or labor were performed on the site, but whether they were performed pursuant to the contract. The Supreme Court s linking the statutory definitions of 6
commencement of the improvement and improvement with 713.06(2)(a) shows that it was explicitly dealing with when the project begins, not when it ends. The Fourth District s decision does not create conflict with this Court s decision in Stunkel, because the two cases are completely factually distinguishable, and in Stunkel, this Court was examining a claim of lien where the subcontractor is not in privity with the owner pursuant to 713.06(2)(a), Fla.Stat. Moreover, Petitioner boldly misstates the holding in Stunkel in an unavailing attempt to demonstrate express and direct conflict. The Stunkel Court held (660 So.2d at 627): that the forty-five day period for notice under Section 713.06(2)(a) begins when the services or materials are furnished at the job site ; not that a furnishing takes place only when the lienor is performing the work contracted for at the job site (Petitioner s Brief at 2-3). Contrary to Petitioner s assertion, nowhere in the Fourth District s Opinion is there any reference to or evidence of the use of a totality of the circumstances analysis. The Supreme Court s rejection of a totality of the circumstances test in Stunkel was precisely to create a bright line, that is tangible activity at the job site, for guidance in future cases involving a contractor not in privity with the owner under 713.06(2)(a), Fla.Stat. (1997). Here, the issues involved the application of 713.08(5),Fla.Stat. (1997) wherein there is a contract between the contractor and the owner, and the circumstances applied by the Fourth District Court here are those which are articulated in the 7
Aronson case, that is, whether the work was performed in good faith, within a reasonable time, pursuant to the contract, and whether it was necessary for a finished job. Consequently, Petitioner s argument that the Fourth District impermissibly applied a totality of the circumstances test is incorrect; the result in every case involving the issue in this case must turn on the specific criteria established in Aronson, applied to the facts of each case. In sum, the Stunkel case established the rule to be applied under 713.06(2)(a), and the Aronson case established the criteria which would govern under 713.08(5). 2 As the Fourth District found, the July 21 fax was sent before termination, during the period of the contract, and the same was pursuant to the contract, it was necessary, it was in good faith, and it was timely, and it therefore met the test for determining whether the nature of the service performed was within the contemplation of the construction lien law such that the services were directly related to the property, and not merely incidental to it. Swedroe, 565 So.2d at 353. Finally, Petitioner, in attempting to analogize Stunkel to the instant case, incorrectly asserts there is no difference between a furnishing under a contract versus a furnishing by 2 Michnal s argument that no different standard should apply under these two statutes is illogical, in that the former is designed to protect persons acting without a contract from an owner claiming that the materialmen s time for serving notice began to run earlier than when they actually did something on the property, so as to shorten the limitation; whereas the latter protects materialmen, such as architects providing materials or services to an owner pursuant to a written contract. 8
materialmen not in privity with the owner. It strains credulity past the breaking point to claim that the Fourth District s decision in the instant case directly or expressly conflicts with the Supreme Court s decision in Stunkel. Next, Michnal claims that conflict is created by the Fourth District s decision in light of language in Robert M. Swedroe Architects/Planners, A.I.A., P.A. v. First American Investment Corp., 565 So.2d 349 (Fla. 1 ST DCA 1990). In Swedroe, the issue was whether the architect s services in providing an engineering inspection and report and later serving as an expert witness in litigation, both within ninety (90) days of the recording a lien, were in fact lienable services. Id. at 352. The court stated the standard governing those issues as follows: The question whether the provision of services or materials has taken place within the statutory limitation period is a question of fact to be resolved by the trier of fact.... The test for determining whether the nature of work performed is within the contemplation of the mechanic s lien law is whether the work was performed (1) in good faith, (2) within a reasonable time, (3) in pursuance of the terms of the contract and (4) necessary for a finished job... Id. at 352-53. The court determined that consultation with engineers was a lienable service, while giving deposition testimony was not. In Swedroe, as here, what took place was not in dispute; the issue was whether the services factually met the tests of good faith, reasonable time, pursuant to the contract and necessity. No direct and express conflict is demonstrated between this case and Swedroe. 9
Finally, there is no evidence that the Fourth District s decision conflicts with the strict compliance rule as set forth in Home Electric of Dade County, Inc. v. Gonas, 547 So.2d 109, 110 (Fla. 1989). Indeed, the Fourth District cited Stunkel for the proposition that lien law is a creature of statute and must be strictly construed; strict adherence to the lien law s time requirements are necessary since contracting parties need certainty about when time periods for notification begin [A 4-5]. There is no express and direct conflict with Home Electric, as required by Fla. Const. Article V, 3(b)(3). CONCLUSION For these reasons, this Court should decline to exercise its discretionary jurisdiction in this case. 10
CERTIFICATE OF SERVICE I HEREBY CERTIFY a true copy of the foregoing was furnished to: JACK J. AIELLO, ESQ., and GREGOR J. SCHWINGHAMMER, JR., ESQ., Gunster, Yoakley & Stewart, P.A., 777 S. Flagler Drive, Suite 500 E., West Palm Beach, FL 33401, by First Class U.S. Mail on July 17 th, 2003. WRIGHT, PONSOLDT & LOZEAU 1000 S.E. Monterey Commons Blvd. Suite 208 Stuart, FL 34996 and CARUSO & BURLINGTON, P.A. Suite 3A/Barristers Bldg. 1615 Forum Place West Palm Beach, FL 33401 (561) 686-8010 Attorneys for Petitioner/Respondent By: By: TIM B. WRIGHT, ESQ. FLA. BAR NO.: 823351 WILLIAM R. PONSOLDT, JR., ESQ. FLA. BAR NO.: 970352 By: DIRAN V. SEROPIAN, ESQ. FLA. BAR NO.: 0773476 11
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CERTIFICATE OF TYPE SIZE & STYLE Respondent hereby certifies that the type size and style of the Brief of Respondent on Jurisdiction is Times New Roman 14pt. DIRAN V. SEROPIAN Florida Bar No. 0773476 T:\BRIEFS\Briefs pdf'd\03-1021_jurisans.wpd 13