JAMES B. PIRTLE CONSTRUCTION CO., INC. v. WARREN HENRY AUTOMOBILES, INC.

Third District Court of Appeal
State of Florida
Opinion filed October 20, 2021.
Not final until disposition of timely filed motion for rehearing.
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No. 3D21-830
Lower Tribunal No. 19-36083
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James B. Pirtle Construction, Co., Inc.,
Petitioner,
vs.
Warren Henry Automobiles, Inc.,
Respondent.
A Writ of Certiorari to the Circuit Court for Miami-Dade County, Gina
Beovides, Judge.
Peckar & Abramson, P.C., and Adam P. Handfinger and Stefanie A.
Salomon, for petitioner.
The Soto Law Group, P.A., and Oscar E. Soto and Andrew V. Cobbe
(Fort Lauderdale), for respondent.
Carlton Fields, P.A., and Sylvia H. Walbolt, Wm. Cary Wright and
Nathaniel G. Foell (Tampa), for South Florida Associated General
Contractors, as amicus curiae.
Haber Law, P.A., and Christopher Utrera, for Oleta Partners, LLC, as
amicus curiae.
Before FERNANDEZ, C.J., and HENDON and GORDO, JJ.
HENDON, J.
James B. Pirtle Construction Company, Inc. (“Pirtle”) files this petition
for writ of certiorari seeking to quash a February 28, 2021, order
discharging Pirtle’s claim of lien against Warren Henry Automobile, Inc.
(“WHA”), and dismissing Count 1 of its Amended Counterclaim. We grant
the petition for writ of certiorari and quash the trial court’s order discharging
Pirtle’s claim of lien and dismissing Count I of the Amended Counterclaim.
Facts
The City of North Miami (“City”) owns certain real property known as
Biscayne Landing located at 2300 NE 151 Street in North Miami (the
“Property”). In May 2012, the City leased the property to Oleta Partners,
LLC (“Oleta”) as a sub-landlord. In June 2015, Oleta entered into a Ground
Sublease with WHA for a portion of the Property in order for WHA to
construct and operate an automobile dealership and ancillary uses (the
“Leasehold Interest”). In December 2016, WHA subsequently assigned the
Ground Sublease to CARS-DB4, L.P. (“CARS”). In that agreement, CARS
conveyed a leasehold interest in the Property to WHA who effectively
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became a lower-tier sub-sub-tenant to CARS. In May 2017, WHA and
Pirtle entered into an agreement in which Pirtle agreed to furnish certain
labor, services, and materials for the construction of improvements to
WHA’s dealership construction project (the “Contract”).
Disagreements ensued, and WHA and Pirtle filed their respective
claims against each other. In January 2020, Pirtle filed and recorded an
amended claim of lien (“Claim of Lien”) against WHA’s leasehold interest in
the amount of $4,818,455.63, exclusive of certain additional amounts due
under Pirtle’s Contract with WHA. In May 2020, WHA arranged for the
transfer and recordation of Pirtle’s Claim of Lien to a surety bond. Pirtle
then filed its amended counterclaim and asserted a count for Action to
Enforce Lien Transferred to Bond (Count I), seeking to enforce the claim of
lien against the lien transfer bond. WHA then filed an amended petition to
discharge Pirtle’s Claim of Lien and moved to dismiss Count I of Pirtle’s
amended counterclaim, which Pirtle opposed.
In January 2021, the court held a hearing on the motion, and
subsequently discharged Pirtle’s Claim of Lien and dismissed Count I of its
amended counterclaim. The trial court denied Pirtle’s motion for rehearing
and reconsideration. Pirtle then filed this petition for writ of certiorari.
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Standard of Review
A petition for writ of certiorari is the appropriate vehicle to seek review
of an order granting a motion to vacate a lien. Dracon Constr., Inc. v.
Facility Constr. Mgmt. Inc., 828 So. 2d 1069, 1070 (Fla. 4th DCA 2002). “A
party seeking certiorari review must demonstrate (1) that the contested
order results in material injury in the proceedings that cannot be corrected
on post-judgment appeal and (2) that the order departs from the essential
requirements of the law.” Valencia v. PennyMac Holdings, LLC, 317 So. 3d
178, 180 (Fla. 3d DCA 2021) (quoting Piquet v. Clareway Props. Ltd., 314
So. 3d 423, 427 (Fla. 3d DCA 2020)).
Discussion
We first consider whether Pirtle has demonstrated irreparable harm
that cannot be corrected post-judgment. The trial court’s order discharging
Pirtle’s Claim of Lien against WHA irreparably harms Pirtle by depriving it of
its security to recover any alleged losses from WHA. Losing the benefit of
a recovery under a bond on a claim to enforce a lien constitutes the type of
irreparable harm necessary to entitle a party to certiorari relief. See
Farrey's Wholesale Hardware Co. v. Coltin Elec. Servs., LLC, 263 So. 3d
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168, 179 (Fla. 2d DCA 2018) (citing Gator Boring & Trenching, Inc. v.
Westra Constr. Corp., 210 So. 3d 175, 184 (Fla. 2d DCA 2016)).
We next consider whether the trial court’s order departs from the
essential requirements of law when it concluded that that Pirtle’s Claim of
Lien encumbers the Property itself and the City’s fee simple ownership of
the Property, rather than WHA’s leasehold interest. We conclude that
Pirtle’s Claim of Lien can only exist against WHA’s leasehold interest and
therefore the trial court’s misapplication of chapter 713 amounts to a
departure from the essential requirements of law.
WHA contends that the lower court correctly interpreted the plain
language of section 713.02(3), Florida Statutes, which states in pertinent
part, “[p]ersons in privity with an owner and who perform labor or services
or furnish materials constituting an improvement . . . shall have rights to a
lien on real property as provided in § 713.05.” WHA’s motion below cited to
section 713.05, which states that a “contractor who complies with the
provisions of this part shall . . . have a lien on the real property improved . .
. .” WHA argues that according to these statutory provisions, lien rights can
only extend to “real property,” as defined in section 713.01(26). Section
713.01(26) defines “real property” as “the land that is improved and the
improvements thereon, including fixtures, except any such property owned
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by the state or any county, municipality, school board, or governmental
agency, commission, or political subdivision.” Thus, WHA argues, Pirtle’s
claim of lien was properly discharged because it was attempting to lien
property exempt from the definition of “real property” i.e., property owned
by a municipality. The trial court agreed and based the lien discharge on
this analysis.
Pirtle’s claim of lien can only be against WHA’s leasehold interest, not
the physical Property. This is so because WHA has no ownership interest
in the Property. WHA leases the Property as a sub-sub-lessee and only for
the purpose of constructing and operating an auto dealership which will
generate revenue up the lease chain. WHA’s reliance on section 713.02(3)
is misplaced. That section states “[p]ersons in privity with an owner shall
have rights on real property. . . .” (emphasis added). Section 713.02(3)
applies only to those situations where the lienor is in privity with the owner.
Here, Pirtle is not in privity with the owner, the City of North Miami. Pirtle’s
agreement to perform construction services was with a sub-subtenant,
WHA, which is a subtenant to Oleta, which is the only entity in privity with
the owner, the City of North Miami.
At common law, a leasehold interest was considered a type of
personal property, not realty. See Aurora Grp., Ltd. v. Dep’t of Revenue,
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487 So. 2d 1132 (Fla. 3d DCA 1986). This concept is incorporated into
section 713.11, Florida Statutes, titled, “Liens for improving land in which
the contracting party has no interest.” In this section, Florida’s construction
lien law explicitly states that “[w]hen the person contracting for improving
real property has no interest as owner in the land, no lien shall attach to the
land . . . .” § 713.11, Fla. Stat. (2021) (emphasis added). 1 Further, section
713.10, Florida Statutes (2021), provides:
(1) Except as provided in s. 713.12,[2] a lien under this part
shall extend to, and only to, the right, title, and interest of the
person who contracts for the improvement as such right, title,
and interest exists at the commencement of the improvement
or is thereafter acquired in the real property. When an
improvement is made by a lessee in accordance with an
agreement between such lessee and her or his lessor, the lien
shall extend also to the interest of such lessor.
(Emphasis added). States and municipalities lease public property to
private tenants in order to operate their facilities (e.g., parks, airports), and
contractors doing work for those tenants have lien rights not on the
property, but on the leasehold interest of that tenant.
1
The parties were afforded an extensive hearing and yet the record
indicates that the petitioners did not once refer section 713.11 to the trial
judge.
2
Inapplicable here, section 713.12 is titled: Liens for improving real
property under contract with husband or wife on property of the other or of
both.
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Finally, the Memorandum of Ground Lease between Oleta and the
City explicitly satisfied each and every one of the elements identified in
section 713.103 so as to protect the City from any mechanic’s liens. The
Ground Lease contains the following language:
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Section 713.10, Florida Statutes (2020) provides:
(2)(a) When the lease expressly provides that the interest of the
lessor shall not be subject to liens for improvements made by
the lessee, the lessee shall notify the contractor making any
such improvements of such provision or provisions in the lease,
and the knowing or willful failure of the lessee to provide such
notice to the contractor shall render the contract between the
lessee and the contractor voidable at the option of the
contractor.
(b) The interest of the lessor is not subject to liens for
improvements made by the lessee when:
1. The lease, or a short form or a memorandum of the
lease that contains the specific language in the lease
prohibiting such liability, is recorded in the official records
of the county where the premises are located before the
recording of a notice of commencement for
improvements to the premises and the terms of the lease
expressly prohibit such liability; or
2. The terms of the lease expressly prohibit such liability,
and a notice advising that leases for the rental of
premises on a parcel of land prohibit such liability has
been recorded in the official records of the county in
which the parcel of land is located before the recording of
a notice of commencement for improvements to the
premises.
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Neither [Oleta] nor anyone claiming by, through or under [Oleta]
including, without limitation, contractors, subcontractors,
materialmen, mechanics and laborers, shall have any right to
file or place any construction, materialmen’s or other liens of
any kinds whatsoever upon [City’s] interest in the [Property] or
any portion thereof; on the contrary, any such liens are
specifically prohibited and shall be null and void and of no force
or effect.
Id. This language clearly satisfies section 713.10(2)(b), exempting the
City’s interest in the Property from any sort of lien claim. Thus, Pirtle’s
Claim of Lien could not have subjected the real property owned by the City
to a claim of lien – contrary to the trial court’s order. Reading chapter 713
as a whole and in context of the Contract between WHA (as sublessor to
Oleta) and Pirtle, and the Memorandum of Agreement between the City
and Oleta, Pirtle’s Claim of Lien is against WHA’s leasehold interest, not
against the Property.
We therefore grant Pirtle’s petition for writ of certiorari and quash the
order below discharging Pirtle’s claim of lien and dismissing Count I of the
Amended Counterclaim.
Petition granted, order quashed.
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