CDC BUILDERS V. RIVIERA ALMERIA

SUPREME COURT CASES

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State: Florida

Court: Florida Third District Court

Docket No: 10-1197

Case Date: 12/08/2010

Preview:Third District Court of Appeal
State of Florida, July Term, A.D. 2010
Opinion filed December 8, 2010. Not final until disposition of timely filed motion for rehearing. ________________ No. 10-1197 Lower Tribunal No. 08-2763 ________________

CDC Builders, Inc.,
Petitioner, vs.

Riviera Almeria, LLC, et al.,
Respondents,

A Writ of Certiorari to the Circuit Court for Miami-Dade County, Gill S. Freeman, Judge. Siegfried, Rivera, Lerner, De La Torre & Sobel and Michael J. Kurzman and Tiffany Hurwitz, for petitioner. Daniels, Kashtan, Downs, Robertson & McGirney, and Richard J. Daniels, Madelyn Simon Lozano, Jeremy C. Daniels and Ari A. Sweetbaum, for respondents. Before RAMIREZ, C.J., and GERSTEN and SALTER, JJ., RAMIREZ, C.J. CDC Builders, Inc., appeals the trial court's order granting partial summary judgment. We treat this as a petition for a writ of certiorari. CDC Builders alleges

that the trial court erred when it held that the filing of inaccurate interim payment affidavits in violation of chapter 713, Florida Statutes, allows for the discharge of a lien as a matter of law. We agree and therefore grant the petition. 1. Factual Background Petitioner CDC Builders, Inc. is a general contractor. Respondents Riviera Almeria, Riviera Biltmore, and Riviera Sevilla (collectively "developers") are three entities involved in developing three parcels of property in Coral Gables, Florida. In February of 2006, CDC Builders and the developers entered into substantially similar construction agreements wherein the parties were to construct twenty-five homes/townhomes in Coral Gables, Florida. construction cost of these twenty-five units was $40,000,000. The developers directed CDC Builders to commence construction on eight of the twenty-five homes. Midway through the construction of the eight homes, the developers, citing insufficient financing and lack of sales, exercised its contractual right to terminate CDC Builders for convenience. Although it terminated CDC Builders, the developers nonetheless requested CDC Builders to complete the construction of the eight homes already in progress. CDC Builders continued the work on the eight homes but sought convenience compensation on the seventeen cancelled homes. In January of 2008, CDC Builders filed the underlying action to recover contractual compensation for the developers' termination for convenience. Subsequently, the developers stopped paying CDC Builders for labor, materials, 2 The estimated

and services being provided on the eight homes under construction. Both the developers and CDC Builders claim different reasons for this sudden termination of payments. The developers claim that they discovered CDC builders was

overcharging its contractor's fees and the cost of work, and therefore it was contractually entitled to hold back funds to partially recoup the overcharges. CDC Builders, however, claims that the developers withheld payment in response to the lawsuit, and further in an effort to hedge its contractual exposure for termination for convenience compensation on the seventeen cancelled homes. CDC Builders ultimately completed all construction on the eight homes and obtained certificates of occupancy from the city of Coral Gables. Subsequent to this, CDC Builders recorded claims of lien pursuant to chapter 713, Florida Statutes (2006), in order to recover sums due to it for the work performed on the eight homes. The developers filed counterclaims alleging breach of contract, Both parties filed motions for

fraudulent lien, and violations of FDUTPA.1

summary judgment, including a motion for partial summary judgment filed by the developers. The motion for partial summary judgment, seeking discharge of CDC Builder's claims of lien, is the subject of this appeal. In its motion for partial summary judgment, the developers claimed that CDC Builder's submitted false interim payment affidavits in violation of chapter 713. Specifically, the developers argued that by: (1) withholding entire payments
1

Florida Deceptive and Unfair Trade Practices Act. 3

from subcontractors, and (2) keeping excess retainage from subcontractors, CDC Builders enjoyed a surplus of money. The developers further argued that because CDC Builders had been paid in full (evidenced by the surplus of money), and because of material breaches of the Florida Lien Statutes, the liens against its properties were invalid and fraudulent under Florida Law. The trial court found that chapter 713, when read as a whole, requires a contractor to comply with all statutory provisions, including abstaining from knowingly or intentionally filing false information about the payment status of subcontractors. Relying on evidence before it, the court found there were no questions of material fact that CDC Builders had filed false interim payment applications. Thus, the court agreed with the developers, finding the liens violated chapter 713, and its strict compliance requirement. The trial court granted the developers' motion for partial summary judgment and discharged the liens. CDC Builders appealed this order.2 2. Analysis Because we do not agree with the trial court's interpretation and application of chapter 713, we need not address the summary judgment issue. The issue we address is whether chapter 713 allows for the discharge or invalidation of an otherwise valid construction lien, where the lienor filed an inaccurate interim

On July 21, 2010, this Court treated the Notice of Appeal and the Initial Brief as a Petition for Writ of Certiorari. 4

2

payment request. Specifically, we are concerned with the deleterious impact the trial court's interpretation of chapter 713 would have upon the construction industry as a whole. We disagree with the trial court's ultimate determination that CDC Builder's actions amounted to a violation of sections 713.345 and 713.35, Florida Statutes (2006). When CDC Builders submitted the payment applications in question, it was not doing so pursuant to a statutory requirement. Rather, it did so because it was contractually required to do so. Additionally, we do not believe CDC Builders acted incorrectly when it withheld a retainage from its subcontractors. This is because the contract

between CDC Builders and the developers allowed CDC Builders to retain money from its subcontractors. Section 12.1.8 of the agreement states: "[e]xcept with the [o]wner's prior approval, and as provided in [

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