Gator Boring & Trenching, Inc. v. Westra Construction Corp.

NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING
MOTION AND, IF FILED, DETERMINED
IN THE DISTRICT COURT OF APPEAL
OF FLORIDA
SECOND DISTRICT
GATOR BORING & TRENCHING, INC., )
)
Appellant, )
)
v. ) Case No. 2D15-5453
)
WESTRA CONSTRUCTION CORP., a )
Florida corporation; TRAVELERS )
CASUALTY AND SURETY COMPANY )
OF AMERICA, a Connecticut company; )
and TAMPA ELECTRIC COMPANY, )
)
Appellees. )
)
Opinion filed October 5, 2016.
Appeal from the Circuit Court for Sarasota
County; Peter A. Dubensky, Judge.
Charles P. Young of Emmanuel, Sheppard
& Condon, Pensacola, for Appellant.
George E. Spofford, IV, and William F.
McFetridge, IV, of GrayRobinson, PA,
Tampa, for Appellees Westra Construction
Corp. and Travelers Casualty and Surety
Company of America.
No appearance for Appellee Tampa
Electric Company.
WALLACE, Judge.
Gator Boring & Trenching, Inc. (Gator), seeks appellate review of an
adverse partial summary judgment on claims that it asserted for breach of contract
against Westra Construction Corp. (Westra) and for the recovery on a lien transfer bond
against both Westra and its surety, Travelers Casualty and Surety Company of America
(Travelers). The issues we are called upon to decide raise complex questions about
our jurisdiction and the propriety of the entry of summary judgment in favor of Westra
and Travelers on their defense that the lien filed by Gator was fraudulent within the
meaning of the Construction Lien Law.1 We dismiss Gator's appeal in part, reverse the
orders granting the partial summary judgment in part, grant certiorari relief, and quash in
part the orders under review.
I. THE FACTUAL AND PROCEDURAL BACKGROUND
Westra contracted with Tampa Electric Company (TECO) to build a
fourteen-mile long pipeline in Polk County.2 Westra subcontracted the horizontal
directional drill portion of the project passing under the Alafia River to Gator. When
Gator entered into the subcontract, it apparently believed that the scope of the work
would require it to drill exclusively or primarily through sand. After commencing the
work, Gator found that completion of its portion of the project required it to drill through a
substantial amount of rock. The necessity to drill through rock instead of sand
substantially increased the cost of the contracted work to Gator. After Gator completed
its portion of the project, Westra and TECO did not pay Gator all of the monies that it
1
§§ 713.001-.37, Fla. Stat. (2013).
2
The facts stated in this opinion are drawn from the pleadings, the
answers to interrogatories, the responses to requests for admissions, the affidavits, and
the other documents in the record. We examine these facts in the light most favorable
to Gator as the party against whom the partial summary judgment was entered. See
Markowitz v. Helen Homes of Kendall Corp., 826 So. 2d 256, 259 (Fla. 2002).
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claimed were due. Gator timely filed a claim of lien in the Public Records of Polk
County, Florida.
The total amount of the claim that Gator asserted against Westra and
Travelers on its construction lien was $889,792.70. Of this amount, $676,556.903
represented the damages that Gator claimed as a result of the additional costs incurred
by it in drilling through the unanticipated rock formation. The remainder, $213,235.80,
was for balances due on invoices and amounts for retainage that Gator claimed were
unpaid under its subcontract.
In count I of its first amended complaint, Gator sued Westra for breach of
contract based upon Westra's alleged failure to pay Gator for the work it had performed
under its subcontract with Westra. The amount claimed by Gator on its breach of
contract claim against Westra was $1,031,869.65. The amounts sought by Gator for
the alleged breach of contract in count I of its complaint included the additional cost of
drilling through rock instead of sand as well as other amounts that Gator claimed to be
due and unpaid. A detailed analysis of the additional amounts claimed by Gator on
count I is not pertinent to our consideration of the issues in this case.
After Gator filed its lien to secure recovery of the amounts it claimed
against Westra and TECO, Westra promptly transferred the lien to a bond underwritten
3
Various pleadings in the record report this amount as $676,556.00.
However, we have referred to the amount as $676,556.90 because that is the amount
reflected in the trial court's order granting clarification and because that is the amount
reflected in Gator's answers to Westra's second interrogatories in which Gator itemized
and totaled its additional costs for boring through the unforeseen rock.
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by Travelers. In count II of the first amended complaint, Gator sought to recover the
$889,792.70 from Westra and Travelers on the lien transfer bond.4
Westra and Travelers filed a motion for partial summary judgment on
count I and for dismissal of count II of Gator's first amended complaint to the extent that
those counts sought damages or relief based upon Westra's failure to pay for the
additional work that Gator allegedly performed as a result of the changed conditions at
the job site. In the motion, Westra argued that partial summary judgment should be
granted on count I because Gator's subcontract precluded Gator from receiving
additional money from Westra merely because the work was more difficult and costly
than anticipated. Westra asserted that, as a matter of law, Gator accepted the risk of
changed site conditions because its contract did not include a changed conditions
clause. Furthermore, Westra relied on the provisions in the contract documents that it
claimed expressly stated that Gator had investigated the site, accepted the risk that
conditions might be different than anticipated, and would not be entitled to additional
compensation if the work turned out to be more difficult and costly than expected.
Westra and Travelers raised as their twelfth affirmative defense in their
amended affirmative defenses to Gator's first amended complaint their claim that
Gator's lien was fraudulent and unenforceable under section 713.31(2), Florida Statutes
(2013). Based upon this affirmative defense, Westra and Travelers asserted in their
4
Count III of the first amended complaint alleges an unjust enrichment
claim against TECO based upon its alleged receipt of a benefit from Gator's furnishing
of labor and materials for the project. Count IV alleges a claim for quantum meruit
against TECO on the basis that Gator provided the requested labor and material for the
benefit of TECO and that the labor and materials had a reasonable value for which
TECO had failed to pay. The orders under review did not address counts III and IV, and
those counts are not at issue in this case.
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motion for partial summary judgment that count II should be dismissed upon the entry of
a judgment on Gator's changed conditions claim in count I. They argued that Gator's
lien was fraudulent and unenforceable because the lien included $676,556.90 for the
changed conditions claim, for which Gator could not properly recover.
Following a hearing, the trial court entered an order granting the motion for
partial summary judgment without elaboration. Thereafter, Gator filed a motion for
clarification, pointing out that in the motion for partial summary judgment, Westra sought
partial summary judgment on Gator's changed conditions claim, which was included in
count I, and that Westra and Travelers sought dismissal of count II based on their claim
that Gator's lien was exaggerated as a matter of law. Gator stated that the parties had
conflicting interpretations about the effect of the trial court's order and requested that the
trial court clarify its ruling.
The trial court entered an order granting the motion for clarification. The
order stated that the motion for partial summary judgment was granted based on the
argument that Gator could not recover any additional monies on its changed conditions
claim. The trial court amended its prior order to include additional findings and rulings
as follows: (1) that the subcontract did not include a differing site conditions clause; (2)
that Gator assumed the risk of the differing site conditions; (3) that Gator's $889,792.70
lien included a claim for $676,556.90 as compensation for the differing site condition
claim; (4) that Gator exaggerated its lien in the amount of $676,556.90 for the claim for
differing site conditions, which was not a minor amount; (5) that Gator did not present
evidence that it had consulted with legal counsel or disclosed to counsel all material
facts before filing the lien; (6) that the lien recorded in the Polk County Public Records
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was dismissed; (7) that the clerk was directed to release the lien transfer bond provided
by Travelers; and (8) that count II of the amended complaint was dismissed. Gator
timely appealed both orders.
II. THE QUESTION OF JURISDICTION
A. Introduction
The pleadings reflect that the two orders on appeal have effectively
disposed of the only claim involving Travelers, which was alleged in count II of the first
amended complaint. However, count I includes claims for other damages against
Westra in addition to the claim based on the changed site conditions. These claims
remain pending. Also, Westra filed a counterclaim under section 713.31(2)(c) for the
alleged fraudulent lien against Gator that is unaffected by the orders under review. With
these facts concerning the state of the pleadings in mind, we must consider the
question of our jurisdiction separately as it relates to the claims asserted against
Travelers and Westra.
B. Travelers
Florida Rule of Appellate Procedure 9.110(k) provides as follows:
Except as otherwise provided herein, partial final
judgments are reviewable either on appeal from the partial
final judgment or on appeal from the final judgment in the
entire case. A partial final judgment, other than one that
disposes of an entire case as to any party, is one that
disposes of a separate and distinct cause of action that is
not interdependent with other pleaded claims. If a partial
final judgment totally disposes of an entire case as to any
party, it must be appealed within 30 days of rendition.
Because the trial court's orders completely dispose of all claims involving Travelers, we
have jurisdiction to review Gator's appeal from the dismissal of count II as a partial final
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judgment in accordance with rule 9.110(k). See Behavioral Healthcare Options, Inc. v.
Charter Behavioral Health Sys. of Tampa Bay, Inc., 727 So. 2d 1135, 1136 (Fla. 2d
DCA 1999) (holding that the dismissal of the claims brought by a professional
association against appellees was a final appealable order under rule 9.110(k) because
no other counts remained in which the association was a party). Accordingly, we will
address the orders dismissing count II in favor of Travelers as a final order on appeal.
C. Westra
The trial court's orders are nonfinal and nonappealable to the extent that
they grant a partial summary judgment in favor of Westra on count I (on the changed
conditions claim) and count II because those claims are interrelated with the remaining
claims against Westra under count I and Westra's counterclaim for an alleged fraudulent
lien. See id. (holding that an order of dismissal as it related to claims that were
interrelated with the claims remaining against a party was nonfinal and nonappealable);
see also East Ave., LLC v. Insignia Bank, 136 So. 3d 659, 661 (Fla. 2d DCA 2014)
(noting same); Merkle v. Home Shopping Network, Inc., 916 So. 2d 841, 843 (Fla. 2d
DCA 2005) (noting same). Thus, we must dismiss Gator's appeal to the extent it
challenges the trial court's partial summary judgment concluding that Gator cannot
recover under count I on its changed conditions claim against Westra as a matter of
law.5
The analysis concerning Gator's appeal from the trial court's rulings in
favor of Westra on count II is more complicated. As noted above, the trial court
5
Because we are dismissing Gator's appeal of the trial court's adverse
ruling on the changed conditions claim asserted in count I of the amended complaint,
we express no opinion on the merits of that claim.
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dismissed count II based upon its finding that Gator had exaggerated its lien by
including $676,556.90 in damages alleged on its changed conditions claim that was
asserted in count I. In its order, the trial court dismissed Gator's lien, directed the clerk
to release the lien transfer bond provided by Travelers, and dismissed count II seeking
a recovery against the lien transfer bond.
As noted above, the dismissal of count II in favor of Westra is nonfinal and
nonappealable under the traditional rules of finality of judgments because interrelated
claims remain pending against or by Westra. However, we conclude that Gator is
entitled to certiorari review of this issue because Gator might be subject to irreparable
harm if it were required to wait until the end of the litigation to appeal this issue. See
East Ave., 136 So. 3d at 661 (granting certiorari review on an appeal from a nonfinal
order awarding a partial summary judgment for damages and authorizing execution on
the judgment because the appellant would otherwise be "exposed to enforcement of [a]
judgment at a time when it cannot obtain review of it [or] . . . shield its assets . . . by
posting an appellate supersedeas bond"). If we affirm the trial court's order dismissing
count II in favor of Travelers and releasing the bond, Gator would lose the benefit of a
recovery under the bond on that claim if we later reversed the dismissal of count II in
favor of Westra. In that circumstance, Gator would be without a remedy on the bond.
Accordingly, we may review under our certiorari jurisdiction the trial court's dismissal of
count II in favor of Westra. See id. at 665; see also Fla. R. App. P. 9.040(c) ("If a party
seeks an improper remedy, the cause shall be treated as if the proper remedy had been
sought; provided that it shall not be the responsibility of the court to seek the proper
remedy.")
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III. DISCUSSION
A. Consideration of the Partial Summary Judgment as to Travelers
Although the trial court stated that it was dismissing count II of the first
amended complaint seeking to recover on the lien transfer bond, the trial court actually
granted a summary judgment on this count. The legal analysis of count II involved
application of the law to summary judgment facts, not just the allegations in the first
amended complaint, and was more like a summary judgment than a dismissal.
The function of a motion to dismiss a complaint is to raise as
a question of law the sufficiency of the facts alleged to state
a cause of action. For the purpose of passing upon a motion
to dismiss the Court must assume all facts alleged in the
complaint to be true. Consequently a motion to dismiss a
complaint must be decided on questions of law and
questions of law only.
On the other hand a motion for summary judgment . . .
raises only questions of [f]act and must be decided upon
evidence and not pleadings.
The purpose of a motion to dismiss is to ascertain if
the plaintiff has alleged a good cause of action. The
purpose of a motion for summary judgment is to determine if
there be sufficient evidence to justify a trial upon the issues
made by the pleadings. They thus serve entirely different
functions.
Connolly v. Sebeco, Inc., 89 So. 2d 482, 484 (Fla. 1956).
We review a final order granting summary judgment de novo. Smith v.
Frontier Commc'ns Int'l, Inc., 805 So. 2d 975, 977 (Fla. 2d DCA 2001). On a motion for
summary judgment, the moving party must show that there are no genuine issues of
material fact and that it is entitled to summary judgment as a matter of law. Cerron v.
GMAC Mortg., LLC, 93 So. 3d 456, 457 (Fla. 2d DCA 2012). Until the moving party
meets this burden, there is no duty on the nonmoving party to demonstrate the
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existence of a genuine issue of material fact. Smith, 805 So. 2d at 977. Further, "[i]f the
record reflects the existence of any genuine issue of material fact, or the possibility of
any issue, or if the record raises even the slightest doubt that an issue might exist,
summary judgment is improper." Cook v. Bay Area Renaissance Festival of Largo, Inc.,
164 So. 3d 120, 122 (Fla. 2d DCA 2015) (quoting Schmidt v. State Farm Mut. Ins. Co.,
750 So. 2d 695, 698 (Fla. 2d DCA 2000)).
With respect to remedies for fraud or collusion in a construction lien,
section 713.31 provides, in pertinent part, as follows:
(2)(a) Any lien asserted under this part in which the lienor
has willfully exaggerated the amount for which such lien is
claimed . . . or in which the lienor has compiled his or her
claim with such willful and gross negligence as to amount to
a willful exaggeration shall be deemed a fraudulent lien.
(b) It is a complete defense to any action to enforce a lien
under this part, or against any lien in any action in which the
validity of the lien is an issue, that the lien is a fraudulent
lien; and the court so finding is empowered to and shall
declare the lien unenforceable, and the lienor thereupon
forfeits his or her right to any lien on the property upon which
he or she sought to impress such fraudulent lien. However,
a minor mistake or error in a claim of lien, or a good faith
dispute as to the amount due does not constitute a willful
exaggeration that operates to defeat an otherwise valid lien.
(c) An owner against whose interest in real property a
fraudulent lien is filed, or any contractor, subcontractor, or
sub-subcontractor who suffers damages as a result of the
filing of the fraudulent lien, shall have a right of action for
damages occasioned thereby. The action may be instituted
independently of any other action, or in connection with a
summons to show cause under s. 713.21, or as a
counterclaim or cross-claim to any action to enforce or to
determine the validity of the lien.
(Emphasis added.) Thus, under section 713.31(2), "[a] claim of lien that overstates the
amount claimed is not necessarily fraudulent, unless the exaggeration [was] made
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willfully." Sam Rodgers Props., Inc. v. Chmura, 61 So. 3d 432, 440 (Fla. 2d DCA 2011)
(citing Sharrard v. Ligon, 892 So. 2d 1092, 1097 (Fla. 2d DCA 2004)).
The party asserting that a claim of lien is fraudulent bears the burden of
proving that the lien is fraudulent. Sam Rodgers Props., 61 So. 3d at 439-40. Further,
"a finding of a fraudulent lien by a trial court is not a discretionary matter. As with any
other contested issue, the lienor's intent and good or bad faith in filing a lien must be
based on competent substantial evidence in the record." Delta Painting, Inc. v.
Baumann, 710 So. 2d 663, 664 (Fla. 3d DCA 1998); see also Sam Rodgers Props., 61
So. 3d at 440 (recognizing that "[a] lienor's good or bad faith in filing a lien must be
based on competent, substantial record evidence"). Thus, in order to be entitled to
summary judgment on count II, Travelers had to establish that there remained no
genuine issue of material fact that Gator had willfully overstated the amount claimed in
its lien as a matter of law. Travelers failed to meet this burden.
Here, Travelers did not establish the lack of any genuine issue of material
fact on its defense that Gator's lien was fraudulent. Rather, Travelers argued, and the
trial court accepted, that Gator's lien was fraudulent and unenforceable based upon a
misapplication of the law. The sole basis asserted by Travelers for its fraudulent lien
defense was that Gator lost on its claim against Westra for additional expenses
resulting from its encounter with the unanticipated rock in the path of its drilling
operation. Because Gator included an amount for this claim in its lien, Travelers
argued, the lien was exaggerated as a matter of law. Travelers did not point to any
record evidence to establish that Gator willfully exaggerated its lien by intentionally
including amounts that were not recoverable or that it included an amount for changed
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site conditions in bad faith. Rather, it argued that because Gator's lien included
$676,556.90 on its claim for additional work caused by changed conditions, the trial
court's grant of a summary judgment on that claim automatically established that the
lien was fraudulent and unenforceable.
In concluding that the lien was fraudulent and unenforceable as a matter
of law, the trial court apparently accepted the foregoing argument. It further found that
$676,556.90 was not a minor amount when the total amount of the lien was
$889,792.70. See § 713.31(2)(b) ("[A] minor mistake or error in a claim of lien . . . does
not constitute a willful exaggeration that operates to defeat an otherwise valid lien"). In
addition, the trial court observed that "Gator did not present any evidence that Gator
consulted with legal counsel and disclosed all material facts to counsel prior to filing the
lien." See Sharrard, 892 So. 2d at 1097 (noting that "[a] lienor's consultation with
counsel prior to filing a claim of lien tends to establish that the lienor acted in good faith"
and "is a factor to be considered along with other pertinent factors").
The reasoning that Gator's lien was fraudulent as a matter of law simply
because it lost on its changed conditions claim is erroneous. A "dispute between the
parties as to the amount of compensation due according to the contract plan of
compensation or even a dispute as to the method of compensation provided in the
contract does not convert such a good faith dispute into a fraudulent lien as provided in
section 713.31." Vinci Dev. Co. v. Connell, 509 So. 2d 1128, 1132 (Fla. 2d DCA 1987).
Moreover, simply because a court reduces the amount of a lien does not render the lien
fraudulent. Politano v. GPA Constr. Grp., 9 So. 3d 15, 16 (Fla. 3d DCA 2008); see also
Delta Painting, Inc., 710 So. 2d at 665 (Cope, J., dissenting) (observing that "[b]y
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eliminating from the fraudulent lien statute good faith contract disputes and minor
mistakes or errors, the Legislature intended to reserve fraudulent lien penalties for those
cases where there was a willful, intentional exaggeration or assertion of a claim for
which there was no good-faith basis. . . . [A] lien is not to be deemed fraudulent merely
because it is not embodied in a written contract or change order, so long as there is a
good-faith basis for the claim").
The record and the parties' briefs reflect that Gator's claim that it was
entitled to recover additional monies from Westra as a result of the changed site
conditions was a hotly contested and complex issue involving the legal construction of
Gator's subcontract and other documents as well as an analysis of the law concerning
the assumption of the risk for differing site conditions. Gator's first amended complaint
asserting its claim for damages for the changed site conditions and its claim on the lien
transfer bond including those damages was filed by Gator's attorney. Thereafter, the
parties engaged in substantial discovery and legal analysis before Westra and Travelers
filed their motion for partial summary judgment concerning Gator's entitlement to
payment on its changed site conditions claim. Moreover, the trial court did not find that
Gator's changed condition claim was frivolous or wholly without merit. The parties'
pleadings reflect that they had a genuine dispute about Gator's entitlement to payment
on its changed conditions claim, for which Gator was represented by counsel. In
addition, the record on appeal reflects that Gator's claim of lien was, in fact, prepared by
Gator's counsel.6
6
Gator's claim of lien bears the following statement: "This document
prepared by: Charles P. Young, Emmanuel, Sheppard, & Condon, 30 South Spring
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We conclude that the trial court erred in finding that Travelers was entitled
to summary judgment on count II. In their argument on the motion for partial summary
judgment on count II, Westra and Travelers relied solely on the ground that a
determination by the trial court that Gator was not entitled to recover on its changed
conditions claim made Gator's claim of lien fraudulent and unenforceable. This view—
which the trial court adopted—is based on an incorrect application of the law. Viewed in
the light most favorable to Gator, the record reflects that the parties had a genuine
dispute about Gator's right to recover on its changed conditions claim. Travelers failed
to conclusively establish that Gator willfully exaggerated the amount of its lien by
including that claim. Accordingly, the trial court erred in directing the clerk to release the
lien transfer bond and in dismissing count II in favor of Travelers. The question of
whether Gator's lien is fraudulent within the meaning of section 713.31 is an issue of
fact that remains to be decided at trial. See J.W. Rolle Dev. Corp. v. Neuman, 910 So.
2d 349, 350 (Fla. 4th DCA 2005) (holding that the question of whether a contractor had
filed a fraudulent lien by willfully exaggerating the amount was an issue of fact that
should not have been determined on summary judgment).
B. Consideration of the Partial Summary Judgment as to Westra
Having concluded that Gator is entitled to review by certiorari of the orders
to the extent they dismiss count II in favor of Westra, we must determine whether the
trial court's ruling constituted a departure from the essential requirements of the law.
See East Ave., LLC v. Insignia Bank, 136 So. 3d 659, 665 (Fla. 2d DCA 2014). A
Street, Pensacola, FL 32503." Mr. Young filed the first amended complaint on behalf of
Gator and represents Gator in this appeal.
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departure from the essential requirements of the law means "a violation of a clearly
established principle of law resulting in a miscarriage of justice." Allstate Ins. Co. v.
Kaklamanos, 843 So. 2d 885, 889 (Fla. 2003). For the reasons discussed above, we
conclude that the dismissal of the lien and count II in favor of Westra constituted a
departure from the essential requirements of law. The trial court erroneously concluded
that its granting of a summary judgment against Gator on its changed conditions claim
automatically rendered its lien on that claim (as well as others) to be fraudulent and
unenforceable as a matter of law when the record reflects that the parties had a genuine
dispute about Gator's entitlement to payment on its changed conditions claim. The law
is clearly established that the reduction in the amount of a lien following a good faith
dispute about the amount the lienor may recover under a contract does not render the
lien fraudulent as a matter of law. See § 713.31(2)(b); see also Politano, 9 So. 3d at 16;
Vinci, 509 So. 2d at 1132. Accordingly, we grant certiorari relief and quash the trial
court's orders to the extent they dismiss Gator's lien and count II in favor of Westra.
IV. CONCLUSION
For the foregoing reasons, we dismiss Gator's appeal as nonfinal and
nonappealable to the extent that it seeks review of the trial court's orders granting a
summary judgment in favor of Westra on Gator's changed conditions claim in count I.
We reverse the trial court's orders to the extent they release the lien transfer bond and
dismiss count II in favor of Travelers. In addition, we grant certiorari relief to Gator and
quash the trial court's orders to the extent they dismiss Gator's lien and claim on the lien
transfer bond in count II in favor of Westra.
Dismissed in part, reversed in part, and orders quashed in part.
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VILLANTI, C.J., and BLACK, J., Concur.
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