WOOLEMS, INC. v. CATALINA CASTSTONE CREATIONS, INC.

Third District Court of Appeal
State of Florida
Opinion filed April 5, 2023.
Not final until disposition of timely filed motion for rehearing.
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No. 3D22-770
Lower Tribunal No. 21-193-P
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Woolems, Inc.,
Appellant,
vs.
Catalina Caststone Creations, Inc.,
Appellee.
An Appeal from a non-final order from the Circuit Court for Monroe
County, Timothy J. Koenig, Judge.
Mrachek, Fitzgerald, Rose, Konopka, Thomas & Weiss, P.A., and
Alan B. Rose and Daniel A. Thomas (West Palm Beach), for appellant.
Hershoff, Lupino & Yagel, LLP, and James S. Lupino and Matthew O.
Hutchinson, for appellee.
Before FERNANDEZ, C.J., and LOGUE and HENDON, JJ.
HENDON, J.
Woolems, Inc. (“Woolems”) appeals from a non-final order denying a
motion seeking the release of its lien transfer bond, appealable under Rule
9 .130(a)(3)(B) of the Florida Rules of Appellate Procedure. We affirm.
Facts
Third-party defendant Stone House 1, LLC (“Stone House”)
contracted with Woolems, a general contractor, to provide construction
materials and services to renovate property on Key Largo. Woolems
subcontracted with Appellee Catalina Caststone Creations, Inc. (“Catalina”)
to do the exterior stonework. Catalina alleges that after it completed its
work, Woolems refused to pay it pursuant to their contract. Woolems
advised Catalina that it allegedly failed to complete its work on time,
performed defective and incomplete work, and caused unnecessary
expenses to Woolems.
On April 30, 2021, Catalina filed and recorded a construction lien
against Stone House’s property and sent a copy to Stone House and to
Woolems. Woolems subsequently filed a complaint against Catalina for
discharge of the lien pursuant to section 713.21(4), Florida Statutes,
asserting that because of delays, work defects, repairs, and cost overruns,
among other things, the damages to Woolems exceeded Catalina’s
claimed lien amount.
2
In June 2021, Catalina filed its answer and affirmative defenses to
Woolems’ complaint, and also filed a counterclaim and third-party
complaint against Stone House for breach of contract, quantum meruit,
unjust enrichment, and account stated. On June 22, 2021, after Woolems
filed its complaint and posted a $46,118.27 cash deposit (“Cost Deposit”)
as security, and after Catalina had answered Woolems’ complaint,
Woolems filed a lien transfer bond with the Monroe County Clerk of Courts
pursuant to section 713.24, Florida Statutes. 1 That statute provides that on
1
Section 713.24 (1) provides:
(1) Any lien claimed under this part may be transferred, by any
person having an interest in the real property upon which the
lien is imposed or the contract under which the lien is claimed,
from such real property to other security by either:
(a) Depositing in the clerk's office a sum of money, or
(b) Filing in the clerk's office a bond executed as surety by a
surety insurer licensed to do business in this state, either to
be in an amount equal to the amount demanded in such
claim of lien, plus interest thereon at the legal rate for 3
years, plus $1,000 or 25 percent of the amount demanded in
the claim of lien, whichever is greater, to apply on any
attorney's fees and court costs that may be taxed in any
proceeding to enforce said lien. Such deposit or bond shall
be conditioned to pay any judgment or decree which may be
rendered for the satisfaction of the lien for which such claim
of lien was recorded. Upon making such deposit or filing
such bond, the clerk shall make and record a certificate
showing the transfer of the lien from the real property to the
security and shall mail a copy thereof by registered or
certified mail to the lienor named in the claim of lien so
transferred, at the address stated therein. Upon filing the
certificate of transfer, the real property shall thereupon be
3
filing the certificate of transfer, the real property shall be released from the
claimed lien and the lien is transferred to the security. At that point, the
cloud on Stone House’s property was legally removed. Woolems did not
notify the trial court or Catalina’s counsel that it had filed a Cost Deposit,
but the Clerk of Court mailed, via certified mail, a copy of the Certificate of
Transfer of Lien to Security to Stone House and Catalina.
On June 29, 2021, Stone House filed a notice of contest of lien to
Catalina, noting that Catalina had sixty days after the date of the Clerk’s
certification of that notice within which to file suit to enforce the lien. The
record shows that the Clerk did not send Stone House’s Notice of Contest
of Lien to Catalina until October 19, 2021. Catalina did not file any
response to Stone House’s Notice of Contest of Lien. On October 26,
2021, Catalina filed its motion to file a third-party complaint, and the trial
court granted Catalina’s request to add Stone House as a third-party
defendant. In its third-party complaint, Catalina asserted a count against
Stone House to foreclose Catalina’s original lien against the property,
released from the lien claimed, and such lien shall be
transferred to said security. In the absence of allegations of
privity between the lienor and the owner, and subject to any
order of the court increasing the amount required for the lien
transfer deposit or bond, no other judgment or decree to pay
money may be entered by the court against the owner. . . .
(Emphasis added).
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rather than against Woolems to enforce the transferred lien against security
posted by Woolems back in June 2021.
On December 23, 2021, Woolems filed a motion for release of its
Cost Deposit. Woolems asserted that pursuant to section 713.24(4),
Catalina was required to file suit against Woolems within one year, unless
shortened by operation of law as provided by sections 713.22(1) and (2),
Florida Statutes. Woolems contended that under section 713.22, Stone
House’s notice of contest of lien filed June 29, 2021, recorded in July 2021,
and noticed to Catalina by the Clerk of Court in October 2021, gave
Catalina sixty days after the October certification of service of such notice
to file suit against Woolems. Woolems contended that, as applied, section
713.22 indicates that, because the lienor (Catalina) did not file suit to
enforce its claim of lien as against the lien’s owner (Woolems) within sixty
days, the lien was automatically extinguished.
On the same day Woolems filed its motion for release of Cost
Deposit, Catalina filed a first amended third-party complaint, asserting a
claim to enforce its lien against Stone House, not Woolems. Interestingly,
Catalina attached the Clerk’s certificate which clearly shows Woolems, not
Stone House, is the party that posted the Cost Deposit.
5
Stone House timely filed a motion to dismiss Catalina’s third-party
complaint, asserting, in part, that the lien transfer bond clearly shows that
Woolems, not Stone House, is the proper party against whom to seek lien
foreclosure. Stone House additionally contended, in accord with Woolems’
argument, that the purported lien against it was automatically extinguished
by operation of law as a result of Catalina’s failure to timely sue Woolems
on the lien transfer bond within the statutory sixty days after service of the
notice of contest. 2
On February 24, 2022, Catalina filed a motion for leave to file a first
amended counterclaim now seeking to commence a claim against
Woolems to enforce its lien against the Cost Deposit security. The trial
court granted Catalina’s motion to file a first amended counterclaim against
Woolems to assert claims against the Cost Deposit security.
On March 4, 2022, the trial court held a hearing on Woolems’ motion
for release of its Cost Deposit. The trial court bifurcated the arguments into
1) the timing issue related to Catalina’s alleged failure to sue Woolems on
the Cost Deposit security within sixty days of service of Woolems’ notice of
contest, pursuant to section 713.22, Florida Statutes, and 2) whether
2
Stone House also moved to dismiss Catalina’s remaining counts against it
for quantum meruit and unjust enrichment, or to abate. Those issues are
not on appeal here.
6
Catalina sued the wrong party, Stone House, and if that was fatal to its
claim. After hearing arguments from the parties, the trial court found
Catalina’s amended counterclaim timely filed as it related back to
Catalina’s original filing against Stone House. In the order on appeal, the
trial court granted Stone House’s unopposed motion to dismiss count 1 of
Catalina’s third-party complaint against Stone House for lien foreclosure,3
and denied Woolems’ motion to release its Cost Deposit. Woolems
appealed.
We have jurisdiction under Florida Rule of Appellate Procedure
9.130(a)(3)(C)(ii). Because the trial court's ruling turns on an issue of law,
our review is de novo. 50 State Sec. Serv., Inc. v. Murray, 973 So. 2d 533,
534–35 (Fla. 3d DCA 2007).
Analysis
The trial court correctly applied the relation-back doctrine to find that
Catalina’s amended counterclaim against Woolems was timely filed, although
it was filed outside the limitations period provided by sections 713.22 and .24,
3
The trial court stated that, because this was an in rem action against an
alternate security and not the Stone House property, Catalina’s counts 2
and 3 (quantum meruit and unjust enrichment) against Stone House were
essentially eliminated. However, as those counts were the subject of a
motion to dismiss, the court and parties agreed to set those counts for a
later hearing.
7
Florida Statutes. For purposes of applying the relation-back doctrine, we
observe that Catalina’s amended counterclaim filed outside the limitations
period did not introduce a new party; the real parties, interests, and essential
elements of controversy remained the same as when Stone House was
named as defendant in Catalina’s original complaint and in its amended third-
party complaint. Caduceus Props., LLC v. Graney, 137 So. 3d 987, 993 (Fla.
2014) (holding an amended pleading does not actually introduce a new
defendant when it merely adjusts the status of an existing party) (citing I.
Epstein & Bro. v. First Nat'l Bank of Tampa, 92 Fla. 796, 110 So. 354, 355–56
(1926) (holding that an amendment filed after the expiration of the statute of
limitations period, seeking to change the status of one defendant from a
representative capacity to an individual capacity and dismissing the other
defendant, was not time-barred because it was merely a change in the status
of the parties before the court and did not introduce a new party or cause of
action)). Generally, “the relation-back doctrine does not apply when an
amendment seeks to bring in an entirely new party defendant to the suit after
the statute of limitations period has expired.” Id. at 994. 4 That is not the case
4
See section 1.190:31 Relation Back; Subdivision (c)— Generally:
Applicable Standard; Liberal Construction; Overcomes Strict Statutory
Limitations, 4 Fla. Prac., Civil Procedure § 1.190:31, which provides, in
relevant part,
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here. See also Palafrugell Holdings, Inc. v. Cassel, 825 So. 2d 937, 940 (Fla.
3d DCA 2001) (holding that, although “the original complaint sought a
different form of relief than that requested in the amended complaints,”
amendments would relate back where “the alleged facts which underlie the
complaint and its amended versions are fundamentally the same”). This
comports with Florida’s liberal policy regarding motions to amend. Drish v.
Bos, 298 So. 3d 722, 724 (Fla. 2d DCA 2020). Further, “all doubts should be
resolved in favor of allowing the amendment and refusal to do so generally
constitutes an abuse of discretion unless it clearly appears that 1) allowing
the amendment would prejudice the opposing party, 2) the privilege to amend
has been abused, or 3) amendment would be futile.” Id. (quoting Crown v.
Subdivision (c) of Rule 1.190 provides an exception, however, for
amended pleadings which assert a claim or defense arising out
of “the conduct, transaction, or occurrence set forth or attempted
to be set forth in the original pleading” in which event, the
amendment relates back to the date of the original pleading. No
particular “relation back” language is necessary. This broad
language represents a liberalization of the pre-rule law that the
relation back doctrine was limited to amendments that did not
state a new cause of action. Also, subdivision (c) is itself to be
liberally construed in favor or its relation-back effect. That strict
statutory time limitations may apply, as, for example, under
Florida's mechanic's lien law, does nothing to detract from the
effect of the procedural relation-back rule.
(Citations omitted, emphasis added).
9
Chase Home Fin., 41 So. 3d 978, 979-80 (Fla. 5th DCA 2010)). None of
those elements are present here.
We conclude that Catalina’s amended counterclaim asserted against
Woolems related back to its original and timely-filed contest of lien against
Stone House. The lien was thus not automatically extinguished by operation
of sections 713.22(1) and (2), Florida Statutes, and Catalina’s claim against
the alternate security – the Cost Deposit – can proceed. Accordingly, we
affirm the order denying Woolems’ motion for release of its Cost Deposit.
Affirmed.
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